How to find out what a house is worth
Do your research using these three strategies, on how to find out what a house is worth in the market right now.
Doing your research upfront and being prepared is the best way to make sure you are getting a good deal on the home you are looking to make an offer on to purchase.
What makes it a little tricky, is that there is no hard and fast way of determining the value of a property.
When it comes to understanding what the house is worth, it is important to know that the advertised price is NOT the final sale price.
The price is what the market is willing to pay, so there is no set price.
In Brisbane at the moment, we are starting to see vendors taking less money than the advertised price.
This is called vendor discounting – it is the discount between the originally advertised price and the final sale price.
At the moment, we are seeing clients paying between 5% to 15% less than the advertised price. See the table below for the biggest discount suburbs for houses in and around Brisbane.
So if the asking price is $1,000,000, then actual sale price after negotiation is between $950,000 and $850,000.
Now that you can see that it is possible to get a lower price than the asking price, there are three strategies you can use to get a better understanding of how much a home is worth.
Image 1. Domain did an analysis for the six months to March 2019 of the biggest discounted suburbs in South East QLD.
1. Review ‘sold’ properties on realestate.com.au
Start by going to www.realestate.com.au and navigate to the ‘sold’ tab. Enter in the suburb and house details similar to the home you are considering to get a list of what has sold in the area.
I recommend you drive by 10 to 20 of the ‘sold’ properties, over the last 6 months, that are comparable on some level to the property you are looking to purchase.
2. Property reports from RP Data.
RP Date produce property reports which show what price the property been sold for over the years.
Image 2. RP Data report on a specific address in Camp Hill, Brisbane, shows the sales history.
What is most helpful is the list of a number of comparable properties in the area that have sold. This is a much faster way of getting a short list of properties to drive past than using the ‘sold’ feature on www.realestate.com.au. You also get a demographic summary of the area and a list of local schools.
I can give you property reports like the example one below, if you email me with the address’ of up to three homes you are considering. I’ll send you back the reports usually within 48 hours (it is free, by the way).
Review an example report here.
Image 3. RP Data report shows a list of homes in the surrounding area and what they sold for.
3. Check out similar homes in the same street / suburb.
There really is no better way to understand the area you are looking to buy in, than going to open homes and seeing what homes are selling for. If you have looked at 20 plus properties in the area, then often you will have a better idea of what the home is worth than the real estate agent, or even the vendor. The vendor is unlikely to have seen as many houses as you so trust yourself.
If you are looking to buy a 3 bedroom Queenslander and a similar one just sold down the street, then this is your best comparison point. As long as it is a similar size home (number of bedrooms, bathrooms etc) and the land size and location is comparable, you can use this is a fairly reliable benchmark.
