It can be tricky for a buyer to know what’s a fair price for a property, especially in the current market. Offer too little and you risk missing out on your dream home or investment property. Offer too much and you’ll end up paying more than market value.
So, how do you ensure you’re getting a good deal whilst remaining competitive against other buyers? Here are some tips.
Research Recent Home Sales in the Area
Start by looking at what’s been selling in your preferred neighbourhood. Focus on the immediate area surrounding a potential property (around few kilometres) as values can differ greatly within the same suburb.
Historical price trends are great for background information, but for an accurate gauge of today’s prices, focus on sales within the last few months.
Look for comparable properties
If you’re wanting to buy a three-bedroom home with two bathrooms, there’s no point in looking at sales of one-bedroom units. To be relevant, comparable properties should be in the same way as the one you’re looking at.
Features to consider:
Are the land area and dimensions similar?
Look for properties that are the same proximity to local amenities (like schools and transport lines) as the one you’re interested in
Compare properties with the same number of bedrooms, dining rooms, bathrooms and living areas.
Outside features should be similar, for example, both should have a garage or the same number of parking spaces
Compare properties that are in a similar condition to the one you are interested in.
Observe the market regularly
Property market conditions can change often, so it’s important to keep well-informed of what’s going on. A sale price from even a few months ago may no longer be relevant if conditions have changed.
One way to keep on top of local market conditions is to go to plenty of inspections and auctions. You might even like to befriend a few local real estate agents and ask them to keep you in the loop about upcoming opportunities.
When researching what’s a fair price for a property It’s also a good idea to keep track of:
- Clearance rates (the percentage of properties sold at auction – a good indicator of demand)
- Days on market (how many days it takes for a property to sell)
- Median price (the midway point of all properties sold at market price over a set period).
The advertised price is a guide only
Remember, the price of the property can also change during the marketing campaign, based on comparable sales, market conditions and if any offers are rejected by the vendor.
Don’t be afraid to check with the agent whether the advertised price has changed.
You don’t need to spend countless hours researching – At Crest Lending we’re here to help. We offer a range of property market reports to help get you up to speed with everything from the estimated price range of a particular property to local suburb information and home loan options.
Get in touch today to find out more.