Understanding property market value and how to determine it.

When buying a home, it's not uncommon for properties to sell for more than expected. However, most homes sell for what is considered their 'fair market value'. Understanding this concept and the factors that influence it can help you make a more informed decision.

What is property market value?

The 'market value' of a property is the price it would sell for in the current market. This value isn't fixed; it's a range influenced by various factors. Sellers aim for the highest possible price, while buyers look for the lowest. Here are some strategies to help you determine a property's market value.

Research similar properties

Look for properties similar to the one you're interested in. Similarity can mean the same number of bedrooms, being in the same school zone, comparable quality, features, and size. Start by looking at properties within a few kilometres of your target area. Check their sale prices and how much these have increased from previous sales. Focus on recent sales (within the last year) to ensure you're considering current market conditions. Keep a record of your findings to help you establish a price range.

Talk to the experts

Engage with the vendor, the agent, and even other potential buyers to get their opinions on the property's value. Remember, they might have a vested interest in a higher price. Once you have a rough idea of the property's worth, discuss it with the agent, keeping in mind their goal is to secure the highest price for the seller.

Call in a professional

A professional property valuation can provide a clear idea of what you should be prepared to pay. While this service may cost a few hundred dollars, it can be invaluable, especially for properties you're seriously considering. Note that the valuation you obtain for personal use may differ from the one your lender uses to assess your loan application.

Request a free property profile report

FinancePath offers comprehensive property profile reports that can help you determine which homes are worth your time. These reports include price predictions, suburb insights, comparable sales results, and sales and rental history. Request a free report today to gain valuable insights into the property market.

The property market can be complex. The FinancePath team is dedicated to helping you make informed financial decisions and find the best solutions for your needs. Reach out to us today for expert advice tailored to your unique situation.