The definition of market value is when a willing vendor meets a willing buyer, so price can be heavily impacted by just how willing each of these two parties are! What are the factors affecting property prices? Obviously, market dynamics play a large part also, and we believe there are five other elements (at least) that can affect the price a residential property will sell for.
1. The vendor. If a vendor has realistic expectations from the outset they are more likely to get a fair price for their home. Some owners miss the mark with their dream prices, their properties stay on the market too long, go “stale” and end up selling for less (or not at all). Other owners may strike it lucky and have buyers fall in love and fight over their home, delivering that dream price. But the bottom line is that the vendor needs to be motivated to sell, otherwise they are unlikely to meet the market.
2. The agent. A good agent will manage both the vendors and the buyers and orchestrate the best outcome for their client. A poor agent will miss all sorts of opportunities and this can have a marked effect on the final sale price. They may be lazy and only work with one buyer, not communicating with others who may have paid more. Or they could have a great offer on the property but not have the vendor in a position where they recognize how good that offer is.
3. Other buyers. Even if an owner has low price expectations (there aren’t many of them around!) when there is more than one buyer vying for a property it will usually sell for “market value”. If the property looks like good value, interested buyers will compete until it no longer looks like fair value. This is why a bargain is so hard to come by in Sydney!
4. Your budget and willingness to spend it. You may love a property but simply can’t afford it. You may be able to afford a property but just don’t love it enough to pay more than somebody else will. Your budget may be fixed, but your willingness to part with your money is a huge variable.
5. Your negotiation skills. Lastly, if you find it tough to negotiate on something as emotional as your next home, hire a professional. Buyer negotiation skills play a huge part in the sale price of many properties.
Published 21 October, 2013. Revised 10 April, 2018.
DISCLAIMER: 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.