A Complete Guide On How to Determine a Property’s Value Using Real Estate

Working out the real-time value of a property is such a critical part of the property buying process.

It can also be one of the most challenging. We've created this full and in-depth guide on how to research an accurate valuation of a property. Be sure to read it in full and reach out to the Hello Haus team if you have any other questions - we're here to help!

With the property market in such a state of dynamic flux, one of the most critical skills that every home hunter needs to learn is how to determine the value of a property at that moment in time.

It’s easier said than done, given that historical property prices don’t convey accurate information on current property value. Instead, banks, real estate companies, and private financiers take advantage of comparable properties to decide what a house is worth. It is this technique that home buyers and sellers should also be using to investigate and review before engaging with an agent to make an offer.

To get an accurate value, it is essential to collect as much data as possible regarding the property. There are many factors to consider here. For instance, how much does a swimming pool add or take away in terms of value? Each house is different in some way, and it is necessary to make exact adjustments to determine what value these variations have in monetary terms. This is where experience in property research and purchasing is critical (and where Hello Haus can – and does – help clients every day!

What are comparable properties?

Put simply, if you can establish the costs of similar properties in the vicinity, then you are more likely to estimate the worth of a property accurately. This is the guiding principle that most experienced property buyers rely on as a cornerstone of their strategy.

But this only works if you are making truly accurate matching comparisons. It involves the collection of a considerable amount of information, too, including the property type, size, location within a suburb, and sales history. At a minimum, you need two current comparable listings and three recent sales to come up with a properly accurate property value prediction.

How experienced buyers use real estate comparables

An experienced buyer can use real estate comparables to support their position if they think a home is listed too high. It can also be a useful part of the negotiating strategy to understand why rivals are making the offers that they are, and where the competitive bids might lift to by the end of the process. It’s also an enormously useful tool for potential buyers that are relocating to a new area and are less knowledgeable about the local real estate market. Before they make an offer, they will do their research first to ensure that, based on the comparables, they can make an offer in confidence.

The process: How to get the most accurate real estate comparables

There are two critical components to being able to research comparables. The first is to understand what information, specifically, you’re looking to research. The second is to understand where that information is available. Often buyers are surprised by just how much information they can find out when conducting a property search. There is a lot of it out there, so being able to filter and get to the core “message” is the critical technique that will come with time and experience.

How to use a reputable real estate website to find local comparables

Several well-regarded websites offer plenty of excellent data that can assist your real estate research, although you'll need to do a lot of the work by yourself. You don't need to have a real estate license to access these websites, which include:

Realestate.com.au (Free)    
Domain.com.au (Free)    
RPData CoreLogic (Paid)

Working out the real-time value of a property is such a critical part of the property buying process.

It can also be one of the most challenging. We've created this full and in-depth guide on how to research an accurate valuation of a property. Be sure to read it in full and reach out to the Hello Haus team if you have any other questions - we're here to help!

With the property market in such a state of dynamic flux, one of the most critical skills that every home hunter needs to learn is how to determine the value of a property at that moment in time.

It’s easier said than done, given that historical property prices don’t convey accurate information on current property value. Instead, banks, real estate companies, and private financiers take advantage of comparable properties to decide what a house is worth. It is this technique that home buyers and sellers should also be using to investigate and review before engaging with an agent to make an offer.

To get an accurate value, it is essential to collect as much data as possible regarding the property. There are many factors to consider here. For instance, how much does a swimming pool add or take away in terms of value? Each house is different in some way, and it is necessary to make exact adjustments to determine what value these variations have in monetary terms. This is where experience in property research and purchasing is critical (and where Hello Haus can – and does – help clients every day!

What are comparable properties?

Put simply, if you can establish the costs of similar properties in the vicinity, then you are more likely to estimate the worth of a property accurately. This is the guiding principle that most experienced property buyers rely on as a cornerstone of their strategy.

But this only works if you are making truly accurate matching comparisons. It involves the collection of a considerable amount of information, too, including the property type, size, location within a suburb, and sales history. At a minimum, you need two current comparable listings and three recent sales to come up with a properly accurate property value prediction.

How experienced buyers use real estate comparables

An experienced buyer can use real estate comparables to support their position if they think a home is listed too high. It can also be a useful part of the negotiating strategy to understand why rivals are making the offers that they are, and where the competitive bids might lift to by the end of the process. It’s also an enormously useful tool for potential buyers that are relocating to a new area and are less knowledgeable about the local real estate market. Before they make an offer, they will do their research first to ensure that, based on the comparables, they can make an offer in confidence.

The process: How to get the most accurate real estate comparables

There are two critical components to being able to research comparables. The first is to understand what information, specifically, you’re looking to research. The second is to understand where that information is available. Often buyers are surprised by just how much information they can find out when conducting a property search. There is a lot of it out there, so being able to filter and get to the core “message” is the critical technique that will come with time and experience.

How to use a reputable real estate website to find local comparables

Several well-regarded websites offer plenty of excellent data that can assist your real estate research, although you'll need to do a lot of the work by yourself. You don't need to have a real estate license to access these websites, which include:

Realestate.com.au (Free)                
Domain.com.au (Free)                
RPData CoreLogic (Paid)

As useful as these sites are, there are some things to be aware of in the way they present data. Most critically, do not rely on Automated Valuation Models (AVM). Rather, you’ll need to trawl through the websites yourself to find comparable properties and the prices they sold for to build your own variables.

Search for similar recently sold properties

Start by looking at listings posted on real estate websites for homes similar to and near to the one that you’re looking at buying in the last three to six months. Don’t consider data that is older than this – particularly at the moment, real estate markets are changing in value rapidly, so you’re not going to get an accurate read on the current value of a property by looking at data that’s older than six months.

What data points are you actually looking for?

You’ll quickly realise that because every house is different, it can be difficult to determine which points of data between those houses are comparable, and how to calculate that into the valuation of the property that you’re looking to buy.