RP Data AutoVal Accuracy & Putting in an offer advice

Hi everyone.

I'm a FHB, so please play nice.

Over the past month or so, I have been going to a number of open houses in a pocket of NW Sydney with varying house sizes and age. It also happens to include suburbs that are in high demand.

Some of the suburbs I have been looking at include Stanhope Gardens, The Ponds, Quakers Hill (the pocket adjoining the previously mentioned suburbs), Kings Langley, Acacia Gardens & Glenwood.

I have come across a house that has appealed to both my partner and myself for a number of reasons. If all goes well with the open house this weekend, we were planning on making an offer on the property.

Given the high level of interest in properties in this suburb (and around the area), we have concluded that we will need to make an offer as properties have been selling in most cases after the first open house.

What seems to be the norm nowadays in the Sydney market, the house does not have a price listed. When I contacted the agent re: a price indication, he said they are looking for offers around the mid 600's.

I have researched sold prices in the area (that vary by quite a margin) and more closely, sold prices near the property we are interested in. There seems to be not that many house sales within close proximity of the property within the past year. 2 x properties in the street sold in the first half of this year, one next door that sold for 500k, one up the street that is the same bed/bath/garage configuration, but on a 20% larger block for 600k and one that is on an adjoining street with 1 less bedroom for 625k in June.

I have obtained a RP Data report for the property that has valued it between 465k-586k FSB 11% with a 525k recommended value. Onthehouse lists the property between 600-670k. Mind you, before the property was publicly listed online, the range on onthehouse was 570-690k. The house has had the same owners since 1996, who purchased the house then for 240k.

I realise the above are just tools, therefore I have been using the recent sales near the property and within the suburb as a guide.

As I will more than likely be putting in an offer on the open house (the quick and the dead in this area, otherwise it will be sold), I would be greatly appreciative of any advice on how to put forward a reasonable offer given the above information.

I was thinking maybe starting in the high 5's or a 6 flat. Below the agent's price guide, above RP Data and at the bottom of onthehouse (and similar range to the 3 closest properties to the address sold over the past few months).

Opinions?

Thanks
 
Hi there

Regarding RP data valuation estimates:
I would not give much importance on their estimate since it is an automated estimate. Which means there are a lot of factors that are not taken into account when coming up with the value. One is the condition of the property. It's impossible for RP data or any other data provider to know whether the property is run down or is fully renovated.

However look at the recent sales list that probably came with the valuation and compare your property to those. That should give you a clear indicator what the market values your property.

Also keep in mind that while the property might be valued at $600k, that doesn't mean that the seller is willing to sell it at that price.

I would start negotiating in the high $500k, but that depends on how much you want this property, how much the seller wants to sell it and how many other parties are interested in buying it.

Cheers

Andrew
 
The house has had the same owners since 1996, who purchased the house then for 240k.

Take it with a grain of salt as I don't know the market or area.

However using a rough guide of property doubles every 10 years working from the sale price in 1996 of 240k

1996: 240k
2006: 480k
2016: 960k

Even if you did 1.5 for 2006 - 2014 -> 720k

Given the feedback you provided, I would circle around high 600s low 700s but again no idea on the house, location, improvements, market.
 
Take it with a grain of salt as I don't know the market or area.

However using a rough guide of property doubles every 10 years working from the sale price in 1996 of 240k

1996: 240k
2006: 480k
2016: 960k

Even if you did 1.5 for 2006 - 2014 -> 720k

Given the feedback you provided, I would circle around high 600s low 700s but again no idea on the house, location, improvements, market.

I think making investment decisions based on a rule of thumb that doesn't take any other factors into account is unwise. The best you can do is suburb comparisons, and the owners will definitely be aware of what their neighbours sold for. Start in the high $500ks and get an idea of how it plays out. If you're not set on this house, perhaps consider a buyers agent to help you with your first purchase. There's some excellent ones in Sydney in this forum
 
As others have said, take little notice of valuation "tools" such as RP and OTH- they're basically useless unless you're comparing identical properties side by side in a complex or similar, that have the exact same features.

You need to be ascertaining fair market value by knowing your area intimately and the most recent and best comparable sales. Garnering sufficient local knowledge is imperative when buying so you don't overpay and get into a silent bidding war that escalates beyond what is fair and reasonable. We are seeing many buyers go above what we appraise, so rejection becomes part of the game for us :D However, as a FHB, be sure you know what's happening, what a property is "worth" in this market (a range is fine and being a home buyer you may add a little "emotional coin" to complete the transaction) and negotiate with the agent as effectively as possible, so he knows you're a committed financial buyer. Before you submit your offer, ask how he's going to handle the process, when is the vendor going to make a decision/accept an offer/agree to exchange etc.

I certainly can't comment on value without knowing the specific property however I can tell you that, having bought for a few ;):D clients in that area for some time now :D, it certainly is a very active sellers market- with no signs of slowing down just yet. Best of luck with your negotiations!
 
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