Paying A Fair Price For A Property
Updated: Jun 29, 2020
Knowing what a property is worth is central to avoid paying too much for it.
Do your research
A property is ultimately worth what a vendor is prepared to sell it for and the buyer is prepared to pay. Comparing nearby properties that have sold recently is a great way to assess an acceptable price for the property you are looking at and provides a valuable bargaining tool when you are negotiating with a seller or agent. Make sure the properties are comparable, with a similar land size and number of bedrooms, for example, so you aren’t measuring apples against oranges. Melbourne Mortgage Advice helps their clients with Corelogic Property Research Reports for any property of interest. “These reports contain a wealth of information and will save you time by researching values before heading off to an open house.”
Keep in mind current market conditions
The property market is always changing, so doing this research once and sitting on it for a few months will offer little help. Reading reports, going to open homes and auctions regularly will give you insight into the current state of the market and how much certain properties are going for.
Expand your search
“Our number one tip is to look at properties in the suburb next to the one that you want. It’s a combination of location and building that all buyers are trying to balance and there will always need to be a compromise. We find that first-home buyers in particular usually end up buying in the more affordable suburb next door to the one that they first wanted to buy in.”
Don’t exceed your financial capacity
Knowing your maximum purchase price is critical and this is one of the reasons an experienced mortgage broker is so helpful. Even if a lender was to approve you for a particular loan amount, it doesn’t mean you should borrow it – a higher loan amount means higher interest charges over the life of the loan, increasing the total cost of the property purchase. Only ever commit to a loan that you can afford alongside your current income and real expenditure. When calculating figures for the price of a home, ensure you also budget for maintenance and repair costs, as well as any other expertise you may require in the purchasing process.
As an MFAA Accredited Mortgage Broker, Melbourne Mortgage Advice are experts at helping buyers to work out a sensible budget and price range. We pride ourselves on ensuring borrowers make informed decisions about what they can realistically afford.