This week I am researching how to evaluate the market price for a property. Obviously paying at or below the market value for a property is a worthy goal. You don't want to have to wait for a few years for capital growth if you have overpaid for a property. If you have a good indication of the market price for the property you can avoid emotional attachment and look clearly to see if the numbers stack up for this particular property. So my question is - How do you calculate the market price of the property or what you are willing to pay? From my understanding there are 3 methods to determine market price. Hire a property valuer to come through the property and determine market price - From what I have read, these valuations are often lower than market price in an effort to protect themselves from litigation. These appraisals can cost between $300-600. Have you used this method before? If so, what was your experience like? Various websites such as RP data which estimate market price - I have looked at various websites from Property Value, RPdata, domain and realestate.com. For a property which sold around the 500k mark, these valuations were between 150k in either direction of the sale price. These websites are usually automated and have no information about renovations which would affect the sale price. Is there one company that you rely on more than others? What is your experience with this method? Using comparable sales within the area - This one refers to doing the hard work yourself and finding comparable sales within the area to determine property price. The comparison should include 3 or more sales that meet the following criteria Sold in the last 6 months Close to the property (1km?) Similar to the property you are trying to value Of coarse this is an exact science, the properties you are comparing will all be different. The neighbourhood, proximity to shops/transport, number of bathrooms, size of the property, age of the property ect. How do you account for these differences in the estimated market value? For example, if there are 2 properties on Smith street that are identical except for the second property has an additional bathroom, the first property sold for 500k. How much would the second one sell for with the additional bathroom? How will this change the sale price, and how can I estimate this with some confidence? Thanks for any feedback!