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Buying a house is the biggest step most of us would ever take. With the budget set in place and the desired neighbourhood in mind, you could be on your way to securing your dream home. However, what if the asking price on your dream home appears to be too high or suspiciously low? These five tips can help you know if you are paying a fair price on your property.
Start comparing apples to apples
If you feel that the asking price for a property is more than what the property is really worth you can run the numbers on similar properties in the area. Usually, in the area of your interest, there are various properties up for sale going at a median price to act as a good indicator in terms of how much you should be paying. A House in Perth can come at a median cost of $517,650. You should compare houses with a similar feature in the area in order to tell if you are being asked to pay more than you should.
Wait it out
Fresh properties that have just entered the market are usually set at a higher value to attract buyers. However, some sellers make the mistake of setting the value of the price based on their emotional attachment and how much they initially bought it for. Property that has been inflated by the owner around 10% above its actual market value are less likely to sell their house within 30 days of it being on the market. The longer a house has been on the market the more likely the initial asking price will decrease. If you are set on buying this particular house, then sometimes all it takes is time before placing a lower offer that the seller will be willing to accept.
Check your surroundings
The house in a neighbourhood in which you set your heart on also plays a determining factor on what you can expect to pay. Houses have property values that increase depending on the neighbourhood it is in, amnesties next to it, and its exterior and interior structure. By looking at your surrounding area you will also be able to determine whether what you are being asked to pay for a property is a fair price.
Feel out the market conditions
Imagine your property is perched on a see-saw which is the property market. The property market will swing up meaning that the properties in that area are in high demand in a particular period.
This means that as a buyer you will have more access to a wider pool of property with competitive prices, which could help you find the same property for a reasonable price in another area either than the one you initially started off on. However, when the see-saw swings low this means property prices have dropped making it difficult for a buyer to bag a good deal due to the lack of competitive prices.
If you are armed with good negotiating skills, you might be able to get your seller to sell you the house at a lower asking price. By observing various property markets you will be able to not only find a fair asking price, but you might also find a price that suits your budget. The best time in the property market to invest in a home is
Speak to a reputable real estate agent
Let’s face it, not everyone can look at a property and tell you its estimate value at the drop of a hat. However, real estate agents make a living doing just that. If you are not well acquainted with an area and are not sure about the asking price you can speak to a reputable real estate agent who keeps their eyes and ears on such things every day. They can easily point out other areas that have similar offerings which you are looking for. Real estate agents can guide you through the process of finding a fair asking price by doing a comparative market analysis which helps determine the properties value.
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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.
The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.
Approval for home loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.
The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well as others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.
