Buying a home is a huge financial decision. As such, it is easy to second-guess yourself.
After closing a sale, many buyers find themselves plagued with doubt and remorse. They may have questions like, “Did I pay too much?” or “Is my home loan too costly?”
Sellers also struggle with determining the value of their homes before listing. Set the price too high and scare off potential buyers, resulting in your property sitting on the market for too long. If the asking price is too low, you may lose out on potential financial gains.
The problem can be especially pronounced with selling and buying off-market properties. These are properties that have not been listed across mainstream real estate channels.
Knowing how to determine the value of a home is, thus, a valuable skill for buyers, sellers, and agents.
Below are four practical ways to determine the value of an Australian property reliably:
The market value of your property is constantly fluctuating, thanks to changes in the Australian housing market.
Today, the value estimate of your house is probably not what it was five years ago—or even a year ago! Therefore, basing your asking price on what you bought a home for is not the way to go.
One of the quickest ways to get a reasonable property value estimate is utilising online home value calculators.
A quick search on Google will show you countless websites with property value estimators.
Fortunately, many of these automated valuation tools are free. They also tend to be relatively quick and user-friendly.
Online value calculators make their predictions based on factors that include:
Local listing prices and recent sales data,
Public property records, including property transfers, rental history, deeds of ownership, and tax assessments.
The downside is that the property value estimates these tools provide can vary greatly. An estimate on one site can be wildly different from another. Sometimes, the difference can be in the tune of thousands of dollars.
The estimated value by an individual tool may be way over or under the actual market price.
An online tool isn't able to inspect properties. It can’t tell if a property has been recently renovated, fitted with high-end finishings, or if it has stained carpets.
Use online value calculators only as rough guides on what a property is worth. Take into account information and data from other sources to create a more accurate property valuation.
Another great way to know how much your house is worth is by looking up and analysing current local property sales data.
The housing market changes rapidly. One adverse event in the suburb can send a booming market on a downward spiral.
Using outdated data will yield unreliable property valuation.
Browse websites such as CoreLogic and REIA for accurate land and property information and real estate market reports.
Take a look at local transactions involving comparable properties. Don’t cast the net too wide—limit your search to nearby homes with the same facilities as the subject property.
You can get a list of property sales for any suburb or postcode from CoreLogic RP Data or similar websites. Remember to narrow down your search to the specific suburb and similar dwellings.
Pay attention to sold homes with these attributes:
Within 1 km of the property in question
Sold in the last 6 months
Similar to the home you’re trying to value
Of the properties identified, focus on those most similar to yours. In particular, consider these factors:
How far is the property from amenities/transport?
Are both streets similar in appearance
How big is the property?
Is the land size similar?
What about the living space?
Do the properties have the same number of bedrooms, bathrooms, and car parking spaces?
Do both properties have the same general standard?
If convenient, consider physically checking out similar properties that have been sold. It might give you valuable insights.
Make sure that the properties you use in your comparison are median-priced. Outliers aren’t going to help determine your property’s estimated value range.
Before buying or selling a house, you must do your homework. Learn all you can about the property and the suburb where it is located.
Look up the planning restrictions and zoning regulations as they can significantly impact the property value.
You can get up-to-date information on any suburb by:
Interacting with local agents
Comparing the results of property transactions
Taking a look at council records
It also pays to study the home’s immediate surroundings. Ask yourself the following questions:
What is the reputation of the area?
Does the home face a busy street?
Does it have noise or security concerns?
After studying the property’s surroundings, don’t forget to look within. To get a good picture, think of a home as different components rather than a whole.
Look at these components:
What is the size of the entire property and its dwelling space?
Is the home on a slope?
Is the house positioned in a way that maximises land use?
Does the home have good street appeal?
Facilities and improvements
What extra facilities and upgrades does the property have to offer?
How old is the home, and what is its condition?
How many bedrooms and bathrooms does the home have?
While at it, beware of being too emotionally attached to a home.
Buyers can get so attached to a property that they end up giving an offer that is above market value.
Similarly, a seller who is too attached may expect their house to fetch more than it is worth in the market.
Whether you’re the seller or the buyer, try to stay objective about the property.
Get a Property Value Estimate From an Expert Appraiser
Does researching how much a particular home is worth sound like too much work?
Consider hiring an expert appraiser.
Bear in mind that appraisal and valuation mean slightly different things when it comes to property.
Valuation: A formal report completed by an accredited property valuer. It is a detailed and legally binding document.
Appraisal: A document that is not legally binding. It includes property information that serves as a guide to determine its value. It is not as accurate as a valuation.
Getting your home appraised by an expert will give you a good idea of its worth. Ensure that your appraiser is registered and experienced with your area and property type.
Knowing what your home is worth is invaluable in determining the right asking or buying price.
Sellers get to determine an asking price that is both attainable but leaves room to make a profit. On the other hand, it gives buyers confidence that they’re not paying too much for a property.
One of the best ways to ensure that you get the best deals in the market is by keeping an eye out for off-market properties.
These are properties that are not listed across typical mainstream channels. It often takes 7 to 10 days for agents to prepare a home for on-market campaigns. During that period, the property is considered off-market. It is available for sale, even though it hasn’t been advertised on property sites.
Listing Loop is the first place savvy buyers go to find off-market properties. Listing Loop matches buyers with the most suitable properties in real-time.
By downloading the Listing Loop app and signing up as a buyer, you will have access to listings before they’re available on mainstream real estate websites.
Sign up today to get a headstart in the search for your ideal home
Frequently Asked Questions About Valuing a Property
Do you have more questions? These are some of the most commonly asked:
Why should I know the value of my home?
Knowing the value of a home is essential when you are buying or selling. It also comes in handy in cases such as when applying for a home loan, leasing the property, and dissolving a partnership.
How does someone determine how much their home is worth?
There are various ways to determine the value of any home in Australia. These ways include:
Analysing location data on property sales: You can use data provided by a quick property search online or from a local land authority.
Using online tools: These automated tools will assess available data and the property details. They then give you a free report estimating your home’s value.
Taking a closer look at the home and its surroundings: Gives you insight beyond the information supplied through direct marketing.
Hiring an expert appraiser: The appraiser will take into account local sales of comparable properties, house prices in the local area, rental history, and market conditions to provide you with an accurate report on how much your house is worth.
What factors can impact the value of my property?
Various factors can impact the value of your property. These factors include local market conditions, zoning regulations, and its size and location. Other factors such as street appeal, number of rooms, and renovations are also important.