He recommends buyers check the sold section of the property portals and look at recent sales results within their budget and desired location. Sign up for every agent’s database in the area to receive auction results, he said, and when comparing results, look at land size, level of finish and street.
Buyer’s advocate and chief executive of propertybuyer.com.au, Rich Harvey, said the scarcity of listings in the late spring selling season drove up competition for better quality homes.
Harvey advises a prospective buyer starting the search to attend 10 to 20 auctions over a couple of months, then keep track of the asking price and the selling price on a spreadsheet.
Look at the comparable sales the agent suggested and see if they’re lower, higher, or a fair comparison, keeping in mind the look, construction, floor plan, quality and features, he said.
“The lower end of the market, and what we call Grade B, C and D properties on busy streets, are definitely trading for well below what they were at their peak,” he said. “There is still a strong demand for quality, well-located and well-presented properties.
“Some agents are still underestimating – it’s definitely a problem.”
Cate Bakos, president of the Real Estate Buyers Agents Association of Australia, said if a comparable sale looks inferior, it probably is.
He recommends prospective buyers research properties sold or look at weekend auction results and consider land size, attributes and selling prices. For undisclosed results, recommend calling your sales representative.
Bakos urged buyers to visit auctions and compare selling prices against price guides, as well as observe buyers’ participation to understand their potential rivals.
“Take a look at who’s bidding, why underbidders are your competition — you’ll be confronting them — and take note of what they’ve bid,” he advised.
“So you have an idea in mind of how much your competition needs to spend.”
He recommended not relying on computer-generated appraisal estimates that appear online, especially since the computer model may not always know whether a property has been extended or subdivided.
He said competition for the few remodeled family homes for sale pushes prices past their guides, while some of the first-home buyer products sell in the lower or middle end of its price range.
But properties needing work often go to auction, making an adjustment to the asking price and possibly selling for less, Bakos said.
“It’s not a single-speed market. It’s actually a multi-speed market.