Key Facts

  • Buyers should not be swayed by the listing price but by the value that the property could bring.
  • Overpaying for a property can affect the returns from it, especially when prices drop.
  • The location of the property plays a vital role in determining its value.
  • Zoning for property development or proximity to schools can increase the property value.
  • Buyers should use comparable sales (‘comps’) in the same area as a guide to what they should pay.
  • The general condition and any issues in the house also play into the offer that should be made.
  • Buyers should always take a long-term view on the property market.

Article Summary

The decision on how much to offer for a property should not be based just on the advertised listing price. Doing so could lead buyers to overpay, which can negatively impact returns, especially when house prices decrease. A factor that plays a pivotal role in deciding the offer is the location of the property. If a property is located in an area with zoning for development or is near good schools, it’s likely to add more value.

Another strategy for potential homebuyers is to compare sales prices of similar properties in the same location (also known as ‘comps’), as this provides a reasonable gauge of how much they should offer. The general condition of the house, and any issues such as dampness or a leaky roof, should also be taken into consideration when making an offer.

Most importantly, the article advises potential buyers to take a long-term view on property investments – property prices may fluctuate in the short term, but usually continue to rise in the long term.

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