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What does, “Do your research!” actually mean when you’re trying to buy a house?

research buying houseWhen you’re looking for a new home to buy, everyone always says, ‘Do your research!’

But what does that actually mean?!

Let’s assume you’ve already done your research on the finance side of things and spoken to us about your options. You know how much you can comfortably borrow and have a pre-approval in place.  You’re ready to go house hunting. It’s now time to do some property market research!

We’re all different when it comes to how much property research we want to undertake before putting an offer on a property. Some buyers will want to dive right into and collect all the facts and figures whilst others like to adopt a different approach.

There is no right or wrong way to “do your research.” We’re simply sharing a few strategies here you may like to try.

General research

The first step is generally spending a fair bit of time on a property sales site (like allhomes.com.au)

Checking out the new property listings each week will give you an idea of what properties are on the market and what they are selling for.

Looking at listings, see how long properties stay on the market, attend open homes, talk to real estate agents, attend some auctions. For some clients, that’s all they need to do to feel confident enough to put a fair offer on a property they like.

Dig a little deeper

If you’re more of a numbers person, you may like to take your research a little bit further.

Once you’ve narrowed down a specific suburb/ area you’re keen on, you can start to analyse previous sales data for that area and even drill down to particular streets.

This exercise can help you uncover the top sale for that suburb/ street. You’ll also get a feel for how many properties come up for sale in that suburb. And if you’re looking into a suburb where properties are tightly held, you want to know this as you may need to move quickly when something you like comes up.

Property pictures from old listings can also be your friend.

Let’s say you’re looking at buying a property sold 3 years ago.

You can find property photos from the previous listing and you know what price the property sold for. You also know how the suburb median sales price has changed since the last sale – you can normally find this on the property listing site.

By comparing property photos from 3 years ago to what the property looks like now, you can determine what improvements have been made by the current owner.

Put all this information together and you can come up with an estimate of what the property may be worth today.

Of course the market will determine what a “property is worth,” and arguably it is worth what someone will pay for it. However, doing this analysis yourself often helps to support a feeling you already have about what a specific property is worth. It may also give you the confidence you need as a buyer, to go ahead and make that offer.

Understand land values

Since the price of land is a big component of the sale price of a property, we’d also suggest you have an understanding of land prices and how the Unimproved Values of land compare across different suburbs. Here’s a link to a report we published in November 2017 analysing Canberra land values.

Let the research guide your expectations

Whilst we’re big advocates of doing your research, it’s important not to get stuck in this research cycle.

Yes, you want to make sure you buy the right house and yes, you don’t want to pay too much for it.  But don’t get stuck researching the property market for years without actually doing anything.

We’ve met many buyers over the years who’ve decided to wait for the perfect property at the perfect price and ended up having to spend much more later on, simply because their expectations at the time didn’t match the conditions of the market.

 

*Please note we’re not qualified real estate agents or valuers and definitely do not consider ourselves to be experts in this area. We simply help lots of buyers on a daily basis with the finance aspect of the property purchases and have a very good understanding of what’s happening in the local Canberra property market as a result.

 

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