Property valuation is always a hot topic at dinner tables and barbeques all over the country.
However, house prices in Sydney or Melbourne don’t give an accurate indication of the value of a house in the suburbs.
How can you determine the value of your property?
1. Get a property predictions report
A property predictions report is a great way to estimate the value of your property.
Get a housing market predictions report from propertypredictions.com.au. It contains all information about a property, including the estimated value and details about the surrounding area.
The following information can be found in your complimentary property report from propertypredictions.com.au.
2. Recent RP data should be used
Property markets can change rapidly, so keeping up-to-date with the latest RP data is essential.
RP data (rich Property Data) is a subscription product that allows you to access 20 years’ worth of CoreLogic property data.
RP Data provides extensive information about the property you are looking to buy or sell, including the estimated price range, the recent sales prices of similar properties in the area, and details about nearby properties on the market. You can also find information on suburb performance and a profile.
3. Arrange professional property valuation
Another option is to have a professional property appraisal done.
Buyers and sellers both benefit from a valuation. It provides an accurate indication of the property’s market value, which can help buyers to reduce their risk of overpaying. Sellers can also use a valuation to help them understand their property’s weaknesses and to determine where they should make improvements to increase its value.
The most common reason people request a property valuation is to ensure lenders can determine whether a borrower is eligible for a loan.
A valuer will inspect the property and assess it inside and out, as well as the land’s shape, aspect, and size and its potential for development and zoning.
The property valuer will also take measurements of the building and note the type and age of the rooms, as well as the design and layout of the property.
4. Find out more about the area
Talking to agents, reviewing recent property sales, and attending auctions are ways to discover more about the area. You can get a good idea of the sale price by looking at similar properties in the area.
You might also want to look at the immediate area around the property (i.e., Is it located near a busy street? Is there a lot of crime in the area? ).
It is wise to be familiar with the main factors that affect property values.
5. Bank valuation vs. market valuation
A market valuation, usually done by a realty agent, is an estimate of the possible selling price for your property based on current market values and sales in the area.
A certified valuer, who examines the property’s value over a more extended period, performs a bank (or lender) valuation.
Bank valuations are usually less conservative than market valuations. Banks use them to determine how much money they will lend to you.
Comparison tips to help you estimate the value of your property
1. Take a look at similar properties
It is important to compare your home with similar properties in the area. This will give you the most accurate idea of its value. It’s not worth comparing your two-bedroom, one-bathroom property to a four-bedroom, three bathroom home. The extra bedrooms and bathrooms will push that property into a higher price range.
Consider the size of similar properties. This includes the square metres of living space and bedrooms. Properties that are close to main roads and amenities such as shops, public transport and other services should be compared. Only look at properties in the same condition. You might be able to get a different value from homes that are older or more recent than your property.
2. Compare property features
When comparing properties, you should consider property features. Is your home better or worse than others in the same area? Consider, for example, whether your home has a swimming pool, shed, large backyard, triple garage or even a movie room and tennis court.
To get an idea of the value of your home, exclude properties with similar features.
3. Compare the most recent local sales
To determine the current market value, you will need to consider sales in your locality. It’s important that you remember that sales of property six to twelve months ago may not be relevant today, as the market changes constantly. Refine your search to the past three months.
You can get a good idea of the local property market by visiting local auctions and being present in the area. It’s also a good idea to speak with real estate agents.
You can use these metrics to compare house prices, auction clearance rates, average days on the market, and median house prices. This information can be found on websites such as Realestate.com.au or Domain.com.au.
Common errors made in estimating your property’s value
1. Do not compare similar properties
It’s not a good idea to compare your two-bedroom, 1-bathroom apartment with a home with a backyard to see if they are comparable. They have very different properties and different prices.
It is important to only compare your property with similar properties in the area. This can be challenging in areas with limited inventory or unique homes.
2. Don’t be influenced by the real-estate agent
The value of comparable homes in your neighborhood should not be based solely on what the agent tells you. When comparing sales in your area, it’s best to consult several sources, including data, auctions and agents.
3. Compare your property with new or off-the plan properties
New and off the-plan properties are more expensive than older homes, so it’s not a good idea to compare your home to them.
Compare your property to homes in the same age range. You should be aware that buyers are more likely to buy brand-new properties than there are new homes in your neighborhood.
4. All your media information
Australians love to read about the housing market and are obsessed with it. You shouldn’t completely rely on the media for information about property growth in your region. Most news outlets will report on what’s going on in a capital city, which might be different from what’s happening in your neighborhood.
To get a better picture, it is best to check housing market predictions report.
5. Feel emotionally attached to your home
If you have lived in your home for many years and have so many wonderful memories, it is understandable that you want your home to be a top-selling property. Buyers don’t care if your home is where your children were raised or if your dog is still living in the yard.
Buyers don’t care about how many bedrooms or bathrooms there are. They only care about how spacious the living and kitchen areas are. Do not fall for the trap of thinking that your home is worth less because you love it and have many memories there.
6. Understanding the market for property is difficult
It’s time to learn more about the property forecasts.
If you don’t understand the current state of the property market in your local area as well as in capital cities and across the country, it’s a similar situation. It is a good idea to start attending auctions and open houses in your area, speaking to property expart, keeping up to date with the latest news about property growth.