What’s a fair price for a property?

How do you know how much to pay for a property? As a buyer, it can be tricky.

Offer too much and you’ll end up paying more than market value. Offer too little and you risk missing out on your dream home or investment property.

So, how do you ensure you’re getting a good deal whilst remaining competitive against other buyers? Here are some tips.

Look for recent sales in the area

Start by looking at what’s been selling in your preferred neighbourhood. Focus on the immediate area surrounding a prospective property (say within a few kilometres), as values can differ greatly within the same suburb.

Historical price trends are great for background information, but for an accurate gauge of today’s prices, focus on sales within the last few months.

Look for similar properties

If you’re wanting to buy a three-bedroom home with two bathrooms, there’s no point in looking at sales of one-bedroom units. To be relevant, comparable properties should be pretty similar to the one you’re sussing out.

Features to consider:

  • Dimensions – are the land area and dimensions similar?
  • Location – look for properties that are the same proximity to local amenities (like schools and transport lines) as the one you’re interested in
  • Interior – compare properties with the same number of bedrooms, dining rooms, bathrooms and living areas.
  • Exterior – outside features should be similar, for example, both should have a garage or the same number of parking spaces
  • Condition – compare properties that are in a similar condition to the one you are interested in.

Tune into the market

Property market conditions can change fast, so it’s important to keep abreast of what’s going on. A sale price from even a few months ago may no longer be relevant if conditions have changed.

One way to keep on top of local market conditions is to go to plenty of inspections and auctions. You might even like to befriend a few local real estate agents and ask them to keep you in the loop about upcoming opportunities.

It’s also a good idea to keep track of:

  • Clearance rates (the percentage of properties sold at auction – a good indicator of demand)
  • Days on market (how many days it takes for a property to sell)
  • Median price (the midway point of all properties sold at market price over a set period).

Don’t take the advertised price as gospel

Remember, the advertised price is a guide only. This price can also change during the marketing campaign, based on comparable sales, market conditions and if any offers are rejected by the vendor.

Don’t be afraid to check with the agent whether the advertised price has changed.

Want to hear the good news?

You don’t need to spend countless hours researching – we’re here to help.

We offer a range of free property market reports to help get you up to speed with everything from the estimated price range of a particular property to local suburb information.

Get in touch today to find out more.

What insurance do you need when buying a property?

As we have seen with the recent east coast floods, unforeseen disasters can strike at any time. That’s why it’s so important to protect yourself and your family financially – with the right kind of insurance for when something unexpected happens.

Sure, insurance may not be all that flashy and many people downright begrudge having to pay for it. But it gives you something that’s invaluable: peace of mind that your financial plans are protected, no matter what.

Here are the types of insurance you should think about when buying a property.

Income protection

Say you get sick or have a bad accident and cannot work. Income protection is your financial safety net.

Income protection insurance pays part of your lost income for a set time if you’re unable to work due to partial or total disability, caused by sickness or injury. It takes the financial pressure off you while you get back on your feet and enables you to cover your mortgage repayments and other expenses.

It’s a good idea to check whether you have income protection insurance through your super fund, but if not, we can line you up with a reputable provider. Premiums for this type of insurance outside of super are usually tax deductible.

You may also like to consider trauma insurancetotal and permanent disability insurance and life insurance to protect you and your family’s financial future.

Mortgage protection

Mortgage protection insurance covers the cost of your mortgage repayments if you die or become seriously ill. It should be noted that it is only meant to cover your mortgage repayments and not any other expenses for you or your family.

Mortgage protection insurance may be a wise choice if you already have some other kind of life insurance – say with your super plan.

Landlord insurance

If you own an investment property, be sure to look into landlord insurance. This type of insurance can cover you against the risks landlords often face. Examples include tenant damage, theft, vandalism, fire, storms and other natural disasters.

It may also protect you if the tenant stops paying rent, as well as against other legal liabilities.

As with any insurance choice, it’s important to read the Product Disclosure Statement (PDS) to check what exactly is covered.

Building & Contents

Building or home insurance protects against the cost of rebuilding or repairing your property from things that are outside your control, like fire or natural disasters. You can opt for total replacement cover (to rebuild your home as it was prior to the event), or sum-insured cover (coverage up to a certain amount).

When you buy a property, your mortgage broker will most likely recommend that you insure the property before settlement day. When choosing your policy, make sure you have the right amount of coverage, as well as the right type of insurance for your actual needs.

Contents insurance protects your belongings, including carpets, rugs and curtains, in events such as fires, storms or theft. Often it will be bundled together with home insurance.

How your mortgage broker can help

Planning a property purchase? Working with a mortgage broker takes the burden out of finding the right home loan for your needs and the right type of insurance.

We can access some of Australia’s most respected insurance providers and offer you a competitive price.

Let us do the hard yards for you. Get in touch today.