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So you have found a property that ticks all your boxes, and you want to buy it, so what next? how much should i offer for this property

The most common question I get asked by clients is, "How much should I offer for this property?"

This is a difficult topic and understandably of great concern to most buyers. The difference in offers can vary by an average annual salary. We are talking about a serious amount of money.

Everyone wants to get the best possible deal when they buy! But how do you know what a good deal is?

The 'asking price' or 'bidding guide' given by a selling agent is totally irrelevant to what the actual value of the property is. Bidding guides are often far below what the property is actually worth. There are also times when the bidding guide or asking price is actually fair value, or even below market value.

Before you decide if you’re getting a bargain, and before you even consider making an offer, a good deal of research needs to be done to work out the 'logical market value' of a property.

You need to look at a minimum of between 50 and 100 properties, similar to the type of property you are after, in the immediate area, before you can start to get an idea of the general market value in that area.

Researching properties on the internet simply does not substitute physical inspections. Professional photos can be touched up and can be arranged to give a false impression. Once you have physically inspected all of these properties, you will start to have a good idea of values in that area. You will understand how the market will value certain properties, and you will be in a much better position to know what each property is truly worth. You will understand how each suburb has its own 'pockets' or areas that are more desirable than others. Opposite ends, or opposite sides of the same street can often sell for vastly different levels, as aspects like views, traffic volumes, noise, streetscape, access to transport and amenities can all differ greatly in the immediate area.

Property reports can be a great tool to give you a general idea of a property's value, and give you a list of recent comparable sales. You must also be aware of their limitations. 

Once you obtain this property report, which includes a list of recent comparable sales, you must then drill down into each sale in detail to compare each properties characteristics. The report won't tell you how the floor plan flows, the type and quality of construction, ceiling and window heights, how much natural light each room receives, the properties privacy, or how noisy the street traffic is. It won't tell you the properties potential for value adding, and the potential costs and value outcomes of these improvements. It also will not identify structural defects, or maintenance issues, and the costs to fix these. This is where knowledge and experience is key.

All these attributes must be taken into consideration to see how each compare to the property you are interested in, before you consider investing in the property. You will need to become an area expert before you can make an informed decision.

That will allow you to identify good value straight away, and give you the confidence to make a swift 'educated' offer on the right property when it comes along.

If the property is good value, and definitely worth buying, you can be sure that other informed buyers will notice this also, which is why quick action is critical to securing your property.

The selling agent may, or may not be aware of all these issues, neither would the vendor. Informing them is often a critical part of the negotiation process.

Of equal importance prior to submitting an offer, is determining the needs and motivation of the vendor. Using this critical information, you can devise an offer and terms that will suit both parties, and is likely to be accepted. Most buyers fail to present their formal offer correctly, and this limits their chance of securing the property.

If you cannot dedicate the time and effort required to do all this yourself, then consider using the professional services of a fully licenced Real Estate Buyers Agent.

One who has an in-depth knowledge of the area, and the experience to get you the best result possible. A Buyers Agent with a proven track record that can provide you recent client testimonials of how they performed, and the results they achieved.

It should prove to be the best property decision you could make.