Imagine yourself on selling day where you’re left wondering how you got the price so wrong. Now imagine the opposite, where your home sells for what you’d hoped – or more.
It’s important that you’re confident about the market in order to develop realistic expectations on the outcome. And that starts with accurate, reliable information.
Here are some things to consider:
Get to know what’s happening in your area
Check out property listing sites
They’re a great way to check out the recent home selling prices in your location.
Browse local agents’ websites
Many of them list their most recent results on their sites or in ads.
Head out to auctions
It’s a great way to observe buyer behaviour, sentiment and trends that you can’t get a sense for online. And the turnout alone can help set your expectations. Just don’t stretch or practise your Saturday Night Fever moves when the bidding starts.
Download a property report
Property reports provide a detailed breakdown of the sales in your area, including individual properties. Reports differ depending on who provides them (realtors, valuers, finance companies, etc.) but you can generally expect handy information like:
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the total number of properties sold in a suburb and the average selling price in the last 12 months
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the average asking price compared to the average selling price (a great indicator of how a property’s time on the market can impact what buyers are willing to pay)
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specific details for individual properties, like the number of bedrooms, car spots, etc. so you can make comparisons from similar properties to your own.
If you’re looking for insights for your area, download free NAB Property Reports to get the inside edge.
Get to know your property
Consider an independent valuer
Your agent should have already given you an informed estimate of your property, but professional valuers are often more accurate. By getting another opinion – especially one that’s independent – you’ll get a clearer and more balanced insight into your home’s true value.
Choose a valuer that’s both registered and experienced with your area/property type. For just a few hundred dollars, it’s definitely worth the cost.
Leave any emotional attachment at the door
A common pitfall is confusing your property’s value with what you’re budgeting for. You might have your heart set on buying a special house in your dream location, but this thinking can lead to some tough reality checks. It’s also pretty easy to think your home’s the best on the block, so try to stay objective and compare apples with apples.
What happens if you’ve found your next property before you’ve sold?
Get ready for that next purchase
The property market can be ruthless, so you’ll need your finances sorted to move quickly on a dream home. If you’re borrowing a bit extra for a new place, there are some things that you can do to be prepared and help make that dream closer to reality:
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understand your borrowing power so you know your new home budget
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check if you’re in the position where you have usable equity, this could be released to help you with your next purchase
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make sure you’ve got pre-approval on your home loan to go that next step.
Consider a bridging loan
You’re far more likely to find your dream property before you sell (and before you have some much-needed funds in the bank) but a bridging loan could be your answer.
A bridging loan ‘bridges the gap’ by providing funding to purchase the new property before you have sold the old one. This uses the value of both your new and existing property to help secure the loan needed to purchase. When you sell your existing home it allows you to reduce the loan back down in line with the new property value.
Taking out a bridging loan might seem like a no-brainer, but you’ll be paying it off on top of your current home loan, which can get a bit dicey if you’re not financially prepared.
It’s also crucial to be realistic about how long your place will take to sell and how much you’ll get. The last thing you want is to come up short for a loan that’s had time to accrue a lot more interest than you budgeted for.
Unsure? Contact us on 03 6165 2666 for more about bridging loans and if they’re right for you.
Source: NAB
Reproduced with permission of National Australia Bank (‘NAB’). This article was originally published at https://www.nab.com.au/personal/life-moments/home-property/buy-next-home/property-value
National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686. The information contained in this article is intended to be of a general nature only. Any advice contained in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice on this website, NAB recommends that you consider whether it is appropriate for your circumstances.
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