Picture this.

You’re a homebuyer and you’ve fallen in love with a property with but you’re unsure what amount to offer (or better still, how to make an offer). So, you walk up to the real estate Agent and ask for their advice.

Is this a mistake?

Only partially.

A good Real Estate Agent will do all they can to help you make an offer, because without you, they can’t sell the property. The challenge is that the real estate Agent is working for the vendor.

Their goal is to achieve the highest possible sale price, and the best real estate Agents will use their time assisting you to also help their seller. We’ve heard it all too often where a real estate agent has ‘helped’ a buyer offer more money than they needed to.

But we can’t fault them. Remember, that’s their job.

There’s two ways for you to safeguard yourself from this situation. The first is doing your own homework. That means speaking to the real estate Agent, sure, but also relying on your own research as to what the property is worth.

So, how do you value a property?

1. Inspect: Start by conducting a thorough on-site inspection of the property. Evaluate its physical attributes, including the layout, condition, and any unique features. Take detailed notes, measurements, and photographs during the inspection. Pay attention to any maintenance issues, structural problems, or upgrades that may impact the property's value.

2. Assess: Next, its time to collect relevant information about the property. This includes details such as the land size, internal floorspace, number of bedrooms, bathrooms & car spaces, age, and any recent renovations or upgrades. Also, ask your conveyancer to complete a contract review which will highlight any legal or historical information that may impact the property's value.

3. Research: This is the big one. Research recent sales data of comparable properties in the local area. Look for properties with similar characteristics to the ones you’ve identified above. From highest weighting to lowest (in our opinion), consider the comparison between land size, location, internal floorspace, number of bedrooms, bathrooms & car spaces, age, and condition. Every property is different, although the most accurate valuations are those that draw conclusions from the sale prices of recently sold properties that are very similar. Analyze the sale prices to identify trends and establish a baseline for the property's value. Consider factors such as proximity to amenities, schools, transportation, and market demand.

4. Review: This is where we assess the broader real estate market conditions and the change in conditions since the recent sales we’re comparing to. Analyze factors such as supply and demand, interest rates, economic indicators, and any local influences. Stay updated on market trends, changes in government regulations, and upcoming infrastructure developments that may impact property values.

5. Compute: Analyze the gathered data and begin to draw conclusions. This is completed by applying a monetary value to each similarity or differentiator between recently sold properties and the subject property and is influenced by current market conditions. Once individual conclusions are drawn, use these to then place a monetary value on the property independent of the real estate agent’s guide price.

We like to provide a range of estimated value although this is often a $20,000 range rather than the standard 10% provided by most real estate Agents. Sometimes our fair value assessment is wildly different to the Agent’s guide, and this often comes down to the individual Agent’’s approach to guiding their properties.

The second way you can safeguard yourself from paying more than you need to for a property is to enlist the help of a Buyers Agent. We specialise in valuing property for our clients here in Newcastle. If you’d like support, inquire now.

Get Started