What’s a fair price for a property?
When purchasing a property, it can be very difficult to know if you’re making the right decision, and on top of that whether you’re overpaying on a property. As a buyer, how do you know if you’re paying too much for a property?
It can also be very difficult to find the appropriate medium when making an offer on a property. Offering too much could lead you to paying over the market value and offering too little could have you missing out on your dream home or investment property.
So, how do you ensure you’re getting a good deal whilst also remaining competitive in the current property market, to ensure you leave potential for further finance plans in the future? Here are some tips below.
Look at recent sales in the area.
Looking at what has been selling and for what price in your preferred neighbourhood can be an excellent start to understanding property prices. Try to focus on the immediate area surrounding a prospective property, as values can still differ greatly within the same suburb.
Historical price trends can also give you great insight, but it is best to focus on sales within the previous few months as the market can change greatly very quickly.
Look for similar properties.
When looking at recent sales, be sure to stick to similar properties for what you’re after. If you’re looking for a three-bedroom house, one-bedroom unit sales are not going to be very relevant or helpful for you.
Some features worth considering:
- Dimensions – are the land area and dimensions similar?
- Location – look at properties that are in the same proximity to local amenities (schools, transport lines etc) as the one you’re interested in.
- Interior – compare properties with the same number of bedrooms, dining rooms, bathrooms and living areas.
- Exterior – outside features should also be similar, for example, both should have a garage or the same number of parking spaces.
- Condition – compare properties that are in a similar condition to the one you’re interested in.
Tune into the market
The property market can change suddenly and rapidly as we have seen over the previous 12 months, so its very important to stay well-informed on where the property market currently is.
If you notice that the property market is changing rapidly then it’s important to recognise this and understand that sales from even a couple months ago, may no longer be relevant in the current market.
One way you can keep on top of the current property market is to attend plenty of inspections and auctions. Seeking advice for a local real estate agent can also be very beneficial to you, they may also be able to keep you informed on any upcoming opportunities.
It can also be beneficial to you to keep track of the following:
- Clearance rates - the percentage of properties sold at auction – this can be a very good indicator of current demand.
- Days on market - how many days does it take the property to sell.
- Don’t be afraid to check in with the real estate agent whether the advertised price has changed.
Understand your borrowing power
Speaking to a broker can ensure you have full understanding of your borrowing power and what you can confidently offer on a property.
Getting a pre-approval can also be very beneficial in giving not only you, but also the vendor the confidence that your finance application will go unconditional without any hiccups.
We’re here to help
All this information can seem daunting and very time consuming. Attending multiple auctions can be unrealistic, especially when we consider family and work obligations.
You don’t need to spend countless hours doing research as we’re here to help.
We can offer a range of property reports to help get you up to speed on the current property market with everything from the estimated price range on a particular property to local suburb information.
Get in touch with us today to find out how we can help you in your property search.