Whether you’re trying to sell your home or looking to buy, doing some market value research is crucial to assess how the property aligns with the current market trend. There’s a lot of conflicting information out there, so to keep it simple we recommend that you seek a valuation from a professional; but if you think you’re up for the challenge and would like to accurately estimate the value of your own home, we’ve put together a quick guide to help you make an informed decision.
1. Find local sales
A little bit of digging can reveal a whole lot. Properties that have recently sold in your local area are a good indication of what you can expect your home’s value to be. When conducting your research, only view properties from the same suburb as your own, then sort the results so the most recent are displayed first. The most relevant properties are ones that are within 1km of your property, sold in the last 6 months, and are similar to the property you want to appraise.
2. Are they comparable?
It is crucial to only compare properties that are most similar to yours. These are the things to look out for:
- Location: are there similarities in street appearance? Is the distance to shops and transport similar? These are both factors that affect property value.
- Size: how does the block size compare? Is the living space similar?
- Rooms: only compare properties that have the same number of bedrooms, bathrooms and car spaces.
- Quality: both properties should be of a similar standard. There’s no point in comparing properties that are not of same or similar quality in structure and presentation.
3. Superior or inferior?
Now that you’ve narrowed your search to comparable properties only, it’s time to sort them into superior and inferior rankings. It is important to be objective in your judgment.
Base your results on the information above (i.e. location, block size, living space, and quality etc). This will give you a price range of value, and a good indication of where your property fits into the market.
4. Adjust for market movements
You may need to make small adjustments to your estimate depending on the current market. Property markets are in a constant state of flux, and in a hot market, comparable sales from more than 3 months ago are considered irrelevant to current conditions. Attend some open homes and auctions in your area to get an idea of what the market is like for your appraisal.
5. Common mistakes and bonus tips
With careful research, it is possible to obtain an accurate appraisal of your property using the above criteria. However, mistakes are always possible when the valuer is not a trained professional. An incorrect appraisal puts you at risk of either overpricing or underpricing your property, neither of which are good outcomes for you. Some common mistakes include:
- Comparing properties currently for sale. These properties have not yet sold, so there is no indication that the listing price is on par with market value.
- Agent influence.
- Not comparing equal properties. Be extra careful to ensure the sales you use are truly comparable, which can be difficult in slow markets or with unique properties.
- Emotional attachment. A lot of people want to believe their home is special, and therefore bump up their asking price. It is important to remember that every potential buyer is viewing your home objectively and doesn’t share the same emotional attachment that you do.
- Not knowing the market. Go to as many open homes and auctions as you can. The more information you have, the better assessment you can make.
- New property comparisons. Remember that people often pay more for brand new properties. Government incentives for buying a new home can temporarily inflate demand, making property values appear more than what they really are.
- Days on the market. This is the average number of days it takes to sell a property is a particular location, which is a great indication of the level of demand for that area.
Selling your home is a big deal and it’s important to get the valuation right. If you’re unsure about your property’s market value, you can contact our skilled real estate agents for pricing advice, but of course if you want your home accurately valued it's best to seek a qualified valuer.