How to Value a Property (Don't Just Trust the Agent)
One of the biggest mistakes first home buyers make is taking the real estate agent’s price guide or even believing a real estate agent. We all know the saying “If their mouth moves, it’s a lie” – might have some truth to it but especially as a first home buyer, don’t believe a single thing they say without double checking yourself. Agents work for the seller, not you, and their quoted range can be well off what a property is actually going to sell for, sometimes deliberately underquoted just to get more people through the door.
Why You Need to Value It Yourself
If you rely purely on what the agent tells you, you risk either overpaying or missing out because you assumed a property was out of reach when it wasn’t. Doing your own research gives you a realistic number to work with when you make an offer or bid at auction.
The Best Way to Do It: Comparable Sales
Head to realestate.com.au and search the sold section for the suburb you’re interested in. Look for properties that are genuinely comparable (filter results), meaning:
- Similar land size
- Similar number of bedrooms and bathrooms
- Similar dwelling size (square metres)
- Sold recently (ideally within the last 3 to 6 months, property values can shift quickly)
Then Look Beyond the Numbers
Once you’ve got a handful of comparable sales, look at the internal condition and finishes of each. A renovated kitchen and bathroom, updated flooring, or a newer roof can all push a sale price up compared to a similar sized property that hasn’t been touched since the 90s.
Case Example
Kristine is looking at a 3 bedroom, 2 bathroom house on 600m2 of land. The agent’s price guide says $700,000 to $750,000.
She searches sold properties in the suburb over the last 4 months and finds:
- A very similar 3 bed, 2 bath house on 580m2, unrenovated, sold for $710,000
- A 3 bed, 2 bath house on 650m2 with a renovated kitchen, sold for $790,000
- A 3 bed, 1 bath house on 600m2, older condition, sold for $665,000
Based on this, Kristine works out the property she’s looking at (which has a slightly dated kitchen but a second bathroom) is probably worth somewhere around $720,000 to $750,000, not the top end of the agent’s guide.
A Few Things to Keep in Mind
Price guides can legally be adjusted as interest grows in a property, so don’t be shocked if a “$700k plus” listing ends up selling well above that. Also keep an eye on how many comparable sales you can actually find. In some suburbs there might only be one or two recent sales to go off, so widen your search area or timeframe slightly if you need to.
The Bottom Line
Never take a price guide at face value. A bit of time spent on realestate.com.au looking at genuine comparable sales will give you a far more accurate picture of what a property is actually worth, and put you in a much stronger position when it comes time to make an offer. Keep in mind that some sales will far exceed your expectations from comparable sales, especially when a buyer becomes emotional and they overpay for the property – take this with a grain of salt.