It’s Saturday morning, your alarm goes off, today is a big day. It’s the auction of your dream home.
There’s a possibility that your dream home will sell for far beyond the buyers guide.
You could have hit the snooze button to save yourself the time, heartache, and sleep (not to mention the money you would have saved on the building inspections and report purchases)!
Here are some of the measures you can take as a buyer to get a realistic estimate of what a house might sell for so you know whether to hit the snooze button on your alarm come Saturday morning or take the first steps down the path to your dream home.
What does property value mean?
There are a number of factors that influence the sale price of a house. Let’s start by talking about what ‘property value’ actually means.
The price that you’re trying to figure out is the ‘market value’ – that’s how much the property would sell for today, in the current market. Usually, this isn’t a fixed number – it’s a range, affected by a number of factors.
Naturally, the vendor wants the sale price as high as possible, and, naturally, you – the buyer – want this number to be as low as possible.
So how do you figure out what you’re dealing with?
Use the tools
Did you know there are tools that predict what a house will actually sell for? Imagine that! Cut through the BS and actually get an unbiased price prediction.
On theOneSpot we have integrated an amazing tool called REALas. It is the most accurate price prediction tool in Australia and will estimate the sale of a home within 5% of what it will actually sell for. The best part is that the REALas algorithm estimates changes throughout the campaign so you can change your offer accordingly and know when to pursue with aggression or walk away.
Domain and Real Estate also have price prediction tools. You can visit an amazing array of price prediction tools in HouseStash
Call in a professional
For a few hundred dollars you can pay for a professional property valuation to give you an idea of what you should be prepared to pay.
This isn’t a great option for every property you’re looking at. It’s best to wait for “the one”, that dream home, or for a situation where you have serious doubts about the value of the property or the ‘buyer’s guide’ number.
Through a valuation you might learn that you can’t afford a property. This will save you a few hundred dollars or more on building inspections, purchasing contracts, conveyancing fees etc.
Just remember that the valuation you seek on the property for your personal use is not the same as the valuation your lender will complete when assessing your loan application.
To Sum Up
– Figuring out the value of a property you’re looking at means working out what the market value of the property is, or what it is likely to sell for at the moment.
– Use the property price prediction tools to get unbiased guidance on what the home is really worth.
– You can enlist the services of a professional to give you a valuation. This is usually expensive, so it may not be practical to do this for every property you’ll look at.