As buyers advocates, it is our job to look after the buyer but I must say it gets really tiring when in a rising market people keep banging on about agents under-quoting.
When an agent appraises a property for sale all they can ever use is comparable evidence to establish value. This means they will review property that has sold prior to this one being appraised. Generally speaking, an agent may look at several properties in the immediate vicinity offering similar accommodation, these homes will vary from better to worse and that is how a range is established.
The best types of properties to auction are those that they agent believes will be desirable enough to perform well under competitive conditions – as such, it is you my friends who then determine the ‘real’ value. The next property generally sells for more than the last and this pattern continues in a rising market.
When a property performs really well at auction you will often see that record prices are achieved for an area or street, this is because the agent has done exactly what they are paid to do – that is achieve an outstanding result for their client – sell their home for the highest and best price that the market will pay. Now just because you miss out, and a property achieves a greater price than you anticipated, does not mean the property was under quoted, this is often just a sign of the market performing as it should under competitive conditions.
Rather than feel bad about missing out, I suggest you undertake the following due diligence:
Establish your budget
If for example your budget is $800k, search for properties between $650k – $750k. Those properties advertised with ranges towards your upper limit are almost always expecting more than the upper limit and you will miss out.
Attend several auctions
Attend several auctions for properties advertised in your price range and see what price they get knocked down at – this will show you in real terms what you will get for your money!
If you are unable to purchase what you want within your price range consider the alternatives, position, size and condition. It’s only those with an unlimited budget that don’t have to compromise somewhere and unless this is your forever house you need to start being realistic.
Don’t decide to sit back and wait because the only way is up and you will find yourself further priced out of the market. The old saying, “he who hesitates is lost” could never be truer than in real estate.
And finally, if you still can’t purchase the right property come and see Infolio – we will make it happen, that’s what we do.