I was conducting an open house for an auction recently when a buyer asked the inevitable question, ‘What sort of price are they looking for?’
It’s a fair question, an obvious question and one that no matter the response, always leaves a few questions unanswered.
In Queensland, it’s legislated that there can be no price guides on auction properties.
The agent can provide a list of recent sales, as long as the sellers of the property have approved that list for distribution.
These lists can be helpful but any buyer who has not researched a market, given how easy it is to access data websites like RP Data, shouldn’t be buying anyway.
In other states, agents can give a price guide and every month a story filters through of a property selling thousands of dollars above the price range provided by the agent.
In some cases, it’s caused by strong competition but in others it’s due to misleading price guides.
Many buyers in this market would be better off if they were forced to conduct their own market research.
The answer is housed in the ancient saying, ‘Let the buyer beware’.
Buyers should conduct market research before they purchase.
This is not just limited to desirable aesthetics, schools or lifestyle locations.
Those things are important but once decisions on them are made it’s time to get between the spreadsheets and understand values.
Once upon a time, to find out what had sold or what was for sale took months of investigation but today it is a few hours online, laps of the suburb in the car and some time spent at open homes.
My advice to any buyer is use the web portals.
Websites like realestate.com.au contain nearly 100 per cent of all listings in most markets.
Type in your requirements; bedrooms, bathrooms, style and suburb.
Print out the list of properties, drive past them and inspect them where possible.
Then get access to one of the data sites e.g. RP Data or speak to an agent about getting a list of all the sales in the suburb over the last 12 months.
Repeat the same exercise. The list will be shorter than you think.
Finally, and most importantly, get a pre-approval from the bank so you know your limit.
A buyer armed with this information can move through a market without relying on an agent’s advice in price.
These buyers confidently make offers, turn up to bid at auctions and don’t get frustrated by properties sold with no price guide.
Sometimes an informed buyer will miss out but if they do, they accept that someone else was just prepared to pay little bit over to secure a home.
And they too may choose to pay more but they’ll do it with calculated confidence knowing they can afford it and that future capital growth could cover a slight increase on price.
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