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Valuations.....Best Tips?

Discussion in 'The Buying & Selling Process' started by Gurtofen, 24th Jan, 2016.

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  1. Gurtofen

    Gurtofen Well-Known Member

    Joined:
    13th Jan, 2016
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    Adelaide
    Hi all,
    What is the best way to value a property as close as possible to the potential bank valuation? i.e fair market value?

    I see a lot of posts about doing your own DD and ensuring that you don't overpay for a property but what tools/tips/research should you use as a 'must' to at least narrow the process down and estimate at least close as possible to fair market value? I don't believe anything RE Agents tell me so would like to ensure that any properties I potentially put an offer on, are based on my own research and not a vendor/agents hype.

    Obviously, there are a lot of variables in what someone believes a property is worth but I am talking about real value as the banks would see it.

    Cheers.
     
  2. Bran

    Bran Well-Known Member

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    I do the following (and I am by no means an expert except for 1, maybe 2 suburbs in the whole country).

    Ignore the asking price.
    Know all the sold comparables.
    Look at SQM research and get a feel for the $/m2 in the area
    Go to the auctions. A property passing in gives no indication of the competition, how close it got, vendor bids etc
    Run it by independent area experts that you trust
    Get an onthehouse, residex, and if I can swing it, a CBA desktop val (onthehouse has matched my properties nearly to the dollar with bank vals - i use it as a rough guide, but then moreso to click on the sold history - one year ago? they have to sell. Three years ago? They will want a profit. Thirty years ago? It's gravy - they have a reason to move.
    Offer what you think its worth to you - this is the hard part, and I keep missing out :)
     
    Taku Ekanayake likes this.
  3. D.T.

    D.T. Adelaide Property Manager Business Member

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    You can go too far with this and end up getting "Analysis Paralysis". Once you've been searching for properties in an area for a while, you start to see the patterns - eg 3 bedrooms sells for X, 4 bedrooms sells for Y and differences between left or right side of the suburb etc. It doesn't take very long to soon spot whether something is under / correctly / over priced.

    Most of the stuff on here relating to doing lots of DD are mostly in relation to units (especially new ones as they're marked up for some marketing reason or 'bonus inclusion') or development sites (mostly around being able to do what you think you can do on them).

    If you PM me the address of a property you're serious about I'll flick you a residex report on it.
     
    Mick Butterfield and Bran like this.
  4. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    Bentley and Bran like this.
  5. Bran

    Bran Well-Known Member

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    Exactly right!
    It sounds hard, but its just a matter of practice. Once you know, you know. Except when the suburb moves 17% in a year and you end up not buying anything as you can't see the value anymore :/

    You may not want to do it, but if you mention the suburbs you are interested in, then there is often an area expert who will happily take a look at a link sent via PM.
     
  6. Gurtofen

    Gurtofen Well-Known Member

    Joined:
    13th Jan, 2016
    Posts:
    94
    Location:
    Adelaide
    Thanks for the replies so far.

    D.T. - Don't have any particular property on the cards at the moment....just getting all my ducks in a row as best I can for when the right property comes along. Thanks very much for the offer and I may take you up on that in the future if something comes along....much appreciated. There was a property about 8 weeks ago we were briefly looking into that I would have run by you!

    Propertunity - Thanks for that link......I have been searching through so many threads on both forums....my head hurts and it has been quite time consuming! Your valuation tips are obviously very thorough which is excellent however I would have to condense the list with my knowledge/available time, however it is excellent food for thought and contained some things I hadn't considered.

    Areas I am looking at are very broad but North/North East of Adelaide.....namely Walkley Heights, Modbury Heights, Golden Grove, Tea Tree Gully, Wynn Vale, Greenwith, Gulfview Heights etc........the one pocket I really like is Gulfview Heights but it is an older/newer mix of properties so values range greatly. I am really anywhere from now to 24 months away from a purchase so this all just mainly educational based at the moment. If something comes along though, I want to be ready to act.

    This forum really is an excellent source of knowledge.