Knowing what a property is worth is vital to avoiding paying too much for it. It is easy to let your emotions get involved with such a critical life investment. Auctions especially, can be exciting and stressful situations where it is very easy to pay more for a property than you anticipated.
To avoid this you need to do some research to understand the property market in the area you are interested in buying in.
Firstly, you need to set a benchmark for what you think the home is worth. Comparing nearby properties that have sold recently is the best way to assess an acceptable price for the property you are looking at and provides a valuable bargaining tool when you are negotiating with a seller or agent. Make sure the properties are comparable, with such features as a similar land size, number of bedrooms, and condition of the home. A building inspection will give you confidence in the purchase of the home and highlight any defects or issues that need to be addressed.
Secondly, keep in mind current market conditions. Going to open homes and auctions regularly will give you insight into the current state of the market and how much certain properties are selling for. The property market is always changing, so doing this research once and sitting on it for a few months will offer little help as homes may have varied in price.
Thirdly, expand your search. We all have our favourite suburb where we would love to purchase our new home, however it may just be out of reach or nothing suitable is available. It is worth looking at homes in adjacent suburbs to see if there is a property that ticks all your boxes.
Lastly, don’t exceed your financial capacity. You may receive a pre-approval for a loan amount, however this should be viewed as a maximum amount you can spend. The greater the loan amount, the higher the repayment amounts and the more you will pay in interest over the life of the loan. Dominion Finance will work with you to determine a loan amount that suits your income and expenditure. Everyone’s circumstances are different, therefore it is important to get the right advice.
Dominion Finance can provide you with a valuation of the home you are interested in as one of the services we offer.
As always, Dominion Finance is here to work with you to achieve your financial goals, whether that be to purchase your forever home, an investment property, or refinance you existing loan.