It’s difficult to answer the question, “How much is a property worth?”. The answer does not lie in how much the seller wants. To figure it out for yourself, you’ll have to do your homework. Think about what its worth relative to others that have sold recently in the area. Many sellers make the mistake of thinking their property is valued at a certain figure because of the asking prices of other properties in the area.
Asking prices have nothing to do with value. It’s more important to take notice of the eventual sale prices. The gap between the listed price and the sale price is known as the negotiation rate and that heavily influenced by market conditions. In a seller’s market you will typically see a lower negotiation rate wearers in a buyers market it is likely to be much higher.
In a normal market the negotiation right is somewhere between six and 10%. When you begin to compare homes, it’s important to factor in location. Where its located in the neighborhood – to shops, transport and schools. Many families want to be within a few blocks of the local public school but prefer not to have their backyards adjacent to the school playground.
Next, think about where the house is located on its block or in the building. Is it on a corner? What is the outlook? Is it next to a high-rise building or a block of units? If you are looking at a unit or townhouse for example, is it better to be located on the perimeter, or is an interior location better? In a high-rise building – one side of the building could be more favoured than another because of the sun, views and even the height of the level you will be on. Which is more important to you, the lower cost or the better view?
Remember, a unit with the best view in a building will appreciate faster than other units in the same complex. Value is not always in the eye of the beholder. Every property sells. There’s a buyer for every property. The only thing that stops a property from selling is the price. The true value of property is determined by the buyer and the seller. It’s what a willing buyer is prepared to pay and a willing seller is prepared to accept.