I found an outlier using the outlierTest function in the car package. However, I can see from the results that the Externally Studentized Residual and p-values. This is a result for the full model.

Cooks D Bar Plot:

After using removing the outlier I have used the ols_step_both_aic from the olsrr library and decided that 2 predictors are significant which are bath and sqft.

lm(price~ bath + sqft, data=without_outlier)

Summary:

Although after removing the outlier sqft is not a significant predictor anymore. Did I make a wrong decision removing the outlier? If so why?

Summary with the outlier:

The diagnostic graphics from the chosen model look as follows: