Play the numbers game to buy better
To really understand the market place and recognise a bargain, you ideally need to view between 80 and 100 homes over say, 10 to 12 weeks. That’s a lot easier to achieve if you live in a large city rather than a country town where you might be forced to reduce your viewing list accordingly. However, I think you will understand the general principle: the more houses you see, the more you will understand the market.
Of course you may stumble upon your perfect home during the very first week. Well, if it’s that perfect, buy it. However, be in no doubt that you will understand the market better after you have viewed those 80+ homes and would make a smarter offer than you are about to do right now.
The purpose of viewing all of these homes is to enable you to identify key factors that add (or detract) value to a house and allow you to compare features and how the market has responded in terms of the price achieved. At the open home, get as much information from the agent as you can; how long it has been on the market, whether it has been valued recently, opportunities for extensions, etc. Then follow up with the agent three to four weeks later to find out if it has sold, and if so, for how much. Record all of this and file it with other houses from the same suburb. Review all of the homes you have made notes on and look for common characteristics of the ones that have sold quickest and attracted the highest prices.
All of this research takes time, but don’t be put off by that. The knowledge you gain should enable you to save at least 10% of the home’s value. If the average Auckland home sells for $500,000, that’s at least $50,000 for 10 to 12 weekend’s light work. You will also be absolutely assured that no-one is ever going to take you for a mug. In no time you will be viewing properties and find yourself visualising a price that you feel represents fair value and recognise that anything significantly below that number is bargain material.
