So you have fallen in love with a house that is priced under the “Expressions of Interest” method and you have no idea what to offer?
Don’t worry, you are not alone! It is one of the most complained about methods of pricing since “offers over” was outlawed in January 2016.
Here are a few tips you can use to give yourself some guidance on what offer you should be making:
1) First and foremost, DO NOT make an offer prior to seeking advice from your accountant and broker! Once you have your pre-approved finance you can start making offers WITHIN THE RANGE THAT YOU HAVE BEEN APPROVED FOR… sounds like common sense but unfortunately common sense often gets forgotten when the excitement or stress of purchasing a home takes over.
2) Go to www.realestate.com.au, Click “sold” on the top of the page, complete the search terms such as suburb and how many bedrooms the property is that you are interested in purchasing and select “search” (leave price blank).
Browse through the sold properties and take note of the prices they sold for and any features they had that could have contributed to this price i.e ducted air-conditiong, granny flat potential, pool etc
Unless the property is a one of a kind home, this method should give you plenty of guidance as to where the property you want to purchase sits within the current market.
3) Assuming the property you want to purchase is listed on realestate.com.au, Go back to the realestate.com.au homepage, Click “buy”, this time enter the suburb that the property you are interested in is located and select the largest price range available i.e $50,000 – $10,000,000, select “search”.
Make sure the property is shown
Go back to the price range selection and decrease the upper price range one at a time until the property disappears. Once it disappears from the search result go back to the last price bracket it appeared in, this is your upper price bracket.
Whilst this would not have necessarily have worked prior to 2016, since the introduction of under-quoting legislation one important change from a buyer’s perspective is that the range of a price guide must be within 10 per cent of what is on a seller’s agency agreement or the agent could face hefty penalties.
Obviously the above techniques are not going to be 100% accurate however hopefully they will give you a bit more confidence than you had prior to reading this post.
Happy house hunting!