How much is your home really worth?

How much is your home really worth?

Canberra’s property values haven’t been subject to the same declines that have hit capital city housing markets in other parts of the country – thankfully. Signs have emerged signalling that the worst of the national property downturn is over, and although this had little impact on Canberra’s property prices, is great news for those in the ACT looking at buying and selling property.

As 2019 draws to a close, and with summertime being one of the most popular periods for homeowners to list their property for sale, you could still get your home sold quickly and at asking price. To accomplish this, though, what would you need to do to?

A) Stage your property
B) Hire the right real estate agent, or
C) Price your home competitively

All the above are crucial to an expedient and successful sale, but before a potential buyer even inspects your property or speaks with an agent, they’ll be weighing up the price tag. Why? Because buyers are wary of overpricing, often have a strict budget to work within and have greater access to online tools and data than ever before. Although many buyers are willing to stretch their budget between 5-10% for a home perfectly suited to their needs, they’re cautious about their investment falling into negative equity if market conditions end up worsening long term.

Whilst negative equity isn’t such a problem here in Canberra, buyers are still fixated on finding the right home, at the right price, and are much more likely to make an offer if the price is compelling.

It’s in your best interest as a seller to see to it that your home is competitively priced, and to choose a real estate agent that will help you accomplish this.

What’s the right price?

There are techniques to pricing a home so that both you and the buyer gets what they want.

So, what do you want? To get a fair, market-related price on your home. Buyers want the same thing; they want to feel confident that they are paying a fair price. Where things can get tricky is in deciding what exactly “fair” is. We’ve outlined some simple steps you can follow below, in order to determine what that price may be.

Step 1: Research the current property market

One of the first things you learn in any economics class are the laws of supply and demand. As demand for a property increases, so too does price – until an equilibrium for both is found. Oversupply has an opposite effect on price; prices decrease as more supply is added to the market. When looking for similar homes it’s important to compare apples to apples, meaning properties on a similar sized block with a similar number of bedrooms, bathrooms and vehicle spaces and ideally a similar set of features.

Keep in mind that buyers will probably be inspecting other properties in the same price bracket and suburb and then comparing them against each other. This is where the overall presentation and condition becomes especially important. A fresh coat of paint and some simple landscaping can make a big difference, which you can learn more about in our guide to getting your home ready for sale.

Step 2: Compare the sold price to the listing price

Just because a property was advertised at a certain price, doesn’t necessarily mean it sold for that same amount. When dwellings start selling above or below the asking price en masse, it’s usually an early indication of the market undergoing a correction. One of the best ways to determine what homes are selling for is by regularly checking the weekend auction results. You can also view past sales data, but keep in mind that these figures may not get updated until 3-6 months after settlement as government data often takes a while to become available.

 If you want to get a fair market-related price for your home, you should pay close attention to the final selling price of homes on private treaty and homes that have been auctioned in the last three to four months. This will give you an accurate figure with which to base your expectations around how much your home will sell for.

Step 3: Work on a deduction strategy

After researching the competition and creating a list of similar properties currently on the market and those recently sold, your next step is to analyse how your home stacks up in comparison. One of the best ways to do this is by working on a deduction strategy. This means that instead of adding to your home’s price for every unique or value-added feature, you subtract from the price based on every feature the property lacks in comparison to others on your list.

 Swimming pools are a great example; families on a good income with children (and love to entertain) are probably attracted to a feature like this – but that same pool might completely turn off a property investor who sees the ongoing maintenance as a hassle and unwanted expense. There are several other aspects to consider but this basic principle will give you a realistic view of what buyers are willing to spend on your home.

 While it’s important to have a solid understanding yourself, it pays to have an experienced real estate agent walk you through the pricing aspect. It’s hard to understand how much “worth” buyers place on each specific feature – and even harder to judge your property without bias. An experienced agent has an insider’s perspective into features that different types of buyers desire most and will help you to understand the true value of your residence.

If you’re considering selling your property, why not speak to one of our senior agents? Our agency principal, Peter Tolhurst, has over 25 years experience and would be happy to perform a free, no obligation market appraisal at a time that suits you.

Did you find this article useful? Spread the love and follow us on your favourite platform.