Are you Paying too much?

A question I’m often asked by different people in the marketplace and there is no right or wrong answer, a property does not come with a recommended retail price, therefore a property’s value becomes subjective to the needs of the buyer.

A property’s market value is made up of a number of variable factors and the most common being:

  • Location
  • Land size
  • Comparable recent sales
  • Comparable properties currently for sale
  • Condition of the property

“But that’s more than what I would have paid”

However, increasingly people are willing to pay well above a reserve price – well above what would be considered fair market value. But does this mean that the buyer is paying the wrong price or paying too much for a property?

The answer is subjective to the individual needs and desires of the buyer. Paying an additional 10-15% premium on ‘fair market value’ may seem crazy for the astute investor who is looking to buy a property at a discount with a particular financial objective, but for the owner occupier buying their second or perhaps third home becoming part of their 15-20 year plan for their family to grow, with the extra bedroom and the parents retreat, close to the school their children attend, close to other family members and their favorite restaurant, it would seem crazy not to pay a premium to secure a home that meets or exceeds their ideal buying criteria.

There is no ‘right’ price to pay for a property

So as you can see, and when I am asked if a buyer is paying too much, my response is always the same…

“As a buyer in today’s marketplace you need to have crystal clear vision around your buying objectives and once we can identify what you are ideally looking for in a property we can work together to ensure you make an educated and informed decision.”

Planning is essential and it is necessary to take the time to examine your current circumstances along with your needs and desires as a buyer in today’s marketplace before stepping out into the unknown.

What are your property goals?

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