By Munro Donen, Director & Principal, Propertybuyer East propertybuyer.com.au
The basics of buying a property are reasonably simple. The challenge is getting the most favourable overall result from the buying process. For example, price is important but often the best outcomes relate to the contract’s conditions. By using contract conditions to your advantage, it’s possible to make your offer more attractive than others, particularly in a competitive market.
Getting an accurate appraisal of a property’s value is an essential part of the buying process. Unfortunately, it’s challenging when it comes to assessing worth.
One of the big mistakes people make when buying is relying too much on CoreLogic or Pricefinder reports and expecting them to provide an accurate property price range based on "comparable" sales, which can then set them up for major disappointment as these are not reliable. Mortgage brokers and banks often use CoreLogic reports as their first reference for value.
AI simply doesn’t have the full picture.
The issue is that these “assessments” are AI-driven. While artificial intelligence is fine for general number crunching, it falls short in an important way when assessing property values. AI doesn’t know if a home has been renovated, extended, or altered in some way, whether it’s the property itself or the sales it’s relying on. If the last recorded sale was ten years ago, the AI has no idea what updates have been made since. It’s trying to make an appraisal with incomplete, outdated, and incorrect information.
Buyers try to understand value via sales agent’s advertised price guides which in most cases are unreliable indicators of the true value of a property.
Buyers must first keep in mind that the sales agent is working for their client – the seller – and their job is to get the highest price possible for the property.
A sales agent’s price guide is usually designed to stimulate as much competition as possible for a property. The price guide will generally not reflect the seller’s true expectation of price. Instead, it will often be more conservative in hopes of generating as much interest as possible.
When an agent hands you comparable sales for their listing, they will select comparable properties that support what they want to achieve. It’s generally not a true reflection of arms-length value.
We are familiar with the locations, recent sales, and the properties currently on the market. We have often walked through all these comparables and have intimate knowledge about them. A good buyers’ agent will provide real comparables that reflect where they see real value. Our knowledge, experience, due diligence and relationships with local selling agents allow us to show you the true picture of value.
Our strong relationships with sales agents, means we can quickly tell if you’re being led down the garden path, or if you actually have a great buying opportunity.
A buyers’ agent’s assessment is far more reliable than the ones given by a selling agent.
I recently purchased a property where the price guide was $3.25 million. Through my trusted contacts, I discovered the vendor actually expected over $4 million, but also that they were going through a divorce and were motivated to sell.
My research showed the house was worth between $3.6 and $3.8 million, making it a great buy at the lower end of that range.
I knew that the key to success would be patience, I kept in regular contact with the agent and the property, and after two open-home Saturdays, I could see they weren’t getting anywhere near what they wanted in price. When the sales agent started calling me, that was my moment. I stepped in and secured the property at just under the middle of my range for my client.
Who you know and what you know matters in real estate. The intel we gather gives our clients an edge – far beyond what you’d ever find out from an AI-generated report.
To have one of the friendly Propertybuyer Buyers' Agents to contact you:
or
call us on 1300 655 615 today.
.svg)
.svg)
.svg)
