How to navigate price guides

Navigating the real estate market can be challenging and frustrating, especially when properties are advertised at prices lower than what they eventually sell for. It can also work the other way too where properties are quoted at a price higher than the buyer/market thinks it's worth. Here are some tips to help you handle these situations:

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1. Do Your Research

• Comparable Sales: Check recent sales of similar properties in the area. This will give you a clearer picture of what the market is like and help you to accurately project what properties of similar features or locality will likely sell for.
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• Market Trends: Understand the current market conditions, whether it's a buyer's or seller's market, as these can influence prices. Various factors influence this such as stock levels, interest rates and consumer confidence.

2. Consult Experts

• Buyer's Agents: Work with a knowledgeable buyer's agent who understands the local market and can provide valuable insights. We provide value in multiple areas which always results in a purchasing experience that is less stressful and gets the buyer a  better result.
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• Valuers and Appraisers: Consider getting an independent valuation to have a more accurate understanding of the property's value. This is usually provided by the lender, but usually only happens after exchange. If you want one done prior to purchase, you'll have to pay for it.

3. Set a Realistic Budget

• Budget Planning: Determine what you can afford and stick to your budget. It's important not to get carried away and overextend financially. The next perfect property is always around the corner!
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• Include a Buffer: Have some extra funds set aside in case there are last minute variations. This is also important for minor maintenance items post purchase which almost always arise, other than in brand new builds.

4. Visit Multiple Properties

• Property Inspections: Attend as many inspections as possible to compare different properties and get a sense of what a fair price would be. The more properties you visit, the more you'll note the various features and what buyers are preferencing in a property that attributes a higher weight of value e.g. water views, a double lock-up garage, etc. Even if you don't end up liking these, once they sell you can use the sale price in future comparisons.
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• Open Houses: These can help you gauge the level of interest in a property and the potential competition from other buyers. However, just because there are a lot of people at an open, it doesn't mean there will be a lot of competition. Often properties that are priced too low attract many buyers who ultimately won't be able to afford the property.

5. Ask Direct Questions

• Price Guidance: Don’t hesitate to ask the selling agent for a price guide or range, and inquire about recent sales of similar properties. Sales agents will often place a comparable recent sales sheet next to the contract at the open home which you can use for some guidance on their price expectations.
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• Seller’s Intentions: Try to understand what the seller is hoping for and why they are selling. Helping to match settlement terms, for example, may assist with making your offer more attractive, so finding out key items as soon as possible is important.

6. Know Your Rights‍

• Legal Framework: Familiarise yourself with the laws and protections available in your area regarding property transactions. Consult with your conveyancer/solicitor if you have any questions.

7. Stay Informed

• Real Estate News: Keep up with the latest developments in the real estate market, including changes in regulations. However, be cautious of mainstream media articles which are designed to elicit emotional responses from both buyers and sellers. These sorts of articles create fear and greed and often misguide buyers and sellers alike to what is really happening in the real estate market in which you're buying.
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• Community Forums: Engage in local real estate forums or online communities to share experiences and gather insights from others. There are many great forums but also tread carefully - often posts by users may seem knowledgeable and professional, but can be misleading or incorrect.

8. Manage Your Expectations

• Be Prepared: In competitive markets, properties often sell for more than the advertised price. It's important to be mentally prepared for this possibility and follow the data. If you are prepared and knowledgeable, you will immediately recognise value independent of the price guide, which can work both ways!

By following these steps, you can better navigate the challenges of buying property when prices are advertised with a guide that is different to the final selling price and make more informed decisions going forward.

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