I’ve fallen in love with a house … How much should I offer?
Raine and Horne Murraylands’ Michael Cox offers his advice on a key real estate question: how much is too much, or not enough?
This sponsored story is brought to you by Raine and Horne Murraylands.
You’ve found it – this is the one.
Perhaps it’s the location, or the architecture, the fruit trees or the fireplace: this is the house where you want to spend the next chapter of your life.
How much should you offer for it?
The answer to that question is very different to what it used to be, says Raine and Horne Murraylands senior property consultant Michael Cox.
Here are three factors to consider.
This is not your parents’ housing market
Property values in regional South Australia have risen by 83.4 per cent in the past five years, to an average of $477,000, according to market research firm Proptrack.
That’s the biggest percentage increase of any market in Australia.
Take the shortage of available homes, combine it with population growth and a bit of a bump from last month’s interest rate cut, and you’ve got a recipe for rising prices and strong demand.
Most residential properties in the Murraylands are only on the market for a matter of days.
That means the old rules of property buying don’t apply any more.
“The days of saying ‘I think it’s worth X, but I’m only going to offer Y and see if I can get it a little bit cheaper’ (are gone),” Michael says.
“If you think it’s worth X, go straight to X from the get-go.
“The only time I get clients really upset is when they haven’t offered their best price and I ring them to say they’ve missed out.
“They say, ‘Can I offer more? What can I do?’ but it’s too late – you’ve missed out, sorry.”
Do your own research
In the current market, honestly, vibes are as valuable as listed prices.
If you keep an eye on the properties that are being listed in your area, and what they are selling for, you’ll get a good sense for what you can find within your price range.
If you see a property listed for $450,000, but you think it’s better than houses that have sold for $475,000, you’re probably right – it might end up going for closer to $500,000.
That can be a difficult adjustment for some buyers – after all, you wouldn’t walk into a car dealer and offer $2000 more than what they’re asking.
But real estate is different.
“Every agent has different tactics on how they’re marketing a property, whether it’s a set price or a price range or best offers, which can be confusing to purchasers,” Michael says.
“It comes back to the simple tools you’d use when the market wasn’t as strong: you’ve looked at this property, this property and this property, and the one you’ve looked at is better than those two but not as good as that one over there, so it should sit in this price range.
“Using comparable sales is still the best method for establishing value.
“Then you decide where it sits in terms of what you’d be prepared to pay for it.”
Don’t just check the real estate websites every few weeks, either.
If you’re serious, Michael says, you’ll want to be on there every day – that’s how quickly properties are being listed and sold at the moment.
Don’t feel bad about going above the listed price
Considering what we’ve talked about above – high demand and vague valuations – you might need to reset your mindset a little bit.
Which feeling would you prefer: concern about maybe having over-paid, or disappointment at missing out?
It’s a cruel world sometimes, but that’s the reality in the Murraylands’ property market at the moment.
“If you put your best offer forward and you miss out, yes, you’ve missed out on a property you’ve fallen in love with, but you couldn’t do any more than what you did,” Michael says.
“It wasn’t meant to be.
“If you put your best foot forward but someone’s prepared to pay more, there’s nothing you could have done differently.
“It will be disappointing, but you won’t be disappointed that you’ve tried to get a bargain and made a bad decision.”
Ultimately, the numbers you get from a vendor, an agent, a property’s sales history and comparable properties in the same neighbourhood don’t matter.
Whatever you’re willing and able to pay for the home you’d love to live in, that’s how much you should offer.
“You’ve got to pay what it’s worth to you, not what somebody else is telling you it’s worth,” Michael says.
“If you feel good about that, that’s what it’s worth.”
- More information: Visit www.raineandhorne.com.au/murraylands, call 8532 3833 or drop into Raine and Horne Murraylands’ office at 4 Seventh Street, Murray Bridge.
Advertising to more than 20,000 highly engaged locals can do wonders for your business. Call Murray Bridge News’ Jane Intini on 0418 835 768 or email jane@murraybridge.news.
Peri Strathearn
