As real estate buyers’ agents, we have an obligation to our clients and a requirement under the Property Stock & Station Agents Act to undertake a thorough analysis when determining what purchase price we recommend a client pays.
There’s a lengthy list of factors we take into consideration in order to be confident with our recommendation.
The most important thing to get a handle on is where the property you want to buy sits in relation to other properties in the area. The best way to do is to look at recent sales. These days the information is really easy to come across (and it’s free!). Both domain.com.au & realestate.com.au have the facility for users to search for recent sales – just make sure you check the sale date as the more recent they are, the better. You can look at photos and floor plans, which are particularly helpful. Then you will be able to make comparisons based on location, size, accommodation, parking, architectural style & condition. Rank them from inferior to superior and then see where the property you want to buy fits in.
Other things that we take into account include:
• Assessment of the characteristics that may affect the price people are willing to pay for this property in the current market.
• Is it a property that will attract buyer interest if you need to sell it in a flat market? There are certain types of properties most likely to fall in value in a buyers’ market.
• Is there an obvious way that you can add value? There are ways to make sure an ugly duckling can be turned into a swan.
However, there are also factors that are individual to every buyer.
• How long have you been looking for? Is this the only property that you have found in 12 months that suits your requirements?
• What is your timeframe – own it for 5 years then upgrade, or is this your 20 year home?
• Are you an investor or an owner occupier?
Sometimes you need to pay a premium for a property that is going to suit your needs better than anything else that is likely to come onto the market in the near future. Other times, however, it would be folly to pay a premium for a property that is highly likely to drop in value when the market levels off.
Knowledge is power and the more you know about the suburb you are buying in, the better decision you will make.
Published: 19 July, 2016
Please note: Good Deeds buyers tips are intended to be of a general nature. Please contact us for advice that is specific to your individual circumstances. You may also need to get advice from other professionals such as an accountant, mortgage broker, financial planner or solicitor.