How to Determine a Home's Worth before Making an Offer - What to Know
The prospect of buying a property is always exciting, especially if you're moving into a new home or adding another investment into your portfolio. However, finding out whether or not a house is worth your money makes the process much more daunting.
In a perfect world, a house would have already been appraised even before being put on the market. That informs prospective buyers what it's truly worth, allowing them to make better purchasing decisions. However, this is not how the system works. Know that a buyer has to put in an offer first to jumpstart the appraisal process.
If you're considering buying a home and want to know whether or not you're getting your money's worth before placing an offer, below are three tips that can help you assess the true value of a property.
1. Consult an online home estimator
Perhaps the easiest way of determining the precise value of a home is through an online home estimator, often found on major real estate websites. The only draw is they're not capable of accounting for certain factors that may influence the home price—they can only give a fair estimate.
They will not consider various aspects, such as a renovated kitchen, an outdated paint job, a modified cellar, and a damaged HVAC system, to name a few. While they can give you a good idea of the home's value, you can't expect them to be right on the money. To make the research worth your time, you can try comparing the estimates and averaging them out to get a more accurate value.
2. Request for a home inspection
Getting an appraisal before making an offer is practically impossible. Even if the homeowner agrees, the process will require you to present an exorbitant amount of money. A great workaround would be to request a home inspection instead, which is part of the contract, should the seller accept your offer. Know that doing so will not cost as much as an appraisal and does not serve the same purpose.
During an inspection, a licensed home inspector will meticulously assess the property, examining and scrutinising every aspect of it. The result may not necessarily tell you the exact value of the home, but it will alert you if there are any serious defects that need tending to that can influence your asking price. If you use the inspection’s result in conjunction with the online home estimator, you'll have a clearer idea of the value of the property you're hoping to buy.
3. Consult with a real estate agent
When buying a home, consider the services of a real estate agent because they have the knowledge and industry experience to help you land a good deal. They also have the expertise to advise you accordingly as they know all the factors that affect house prices, including market conditions, economic fluctuations, the length of time the property has been listed, and the less desirable features of the area. Homes that sit on the market for over half a year is typically a sign that they need a price reduction.
Determining the worth of a house doesn’t have to be as daunting as expected. If you’re looking for a registered property valuer in Sydney, get in touch with us today to see how we can help!