A DIY Property buyer (all on their own) tends to rely on a real estate agent’s comparable properties.
That is “T” for trouble.
Agents quote inappropriate comparable properties to qualify their asking price. The buyer at best gets influenced by them and at worst offers a price “comparable” to them.
You must consider the SPECIFIC details of the comparable properties recommended by the agent to your own. That is equal to if not more important than your “other” specification i.e. price.
Selling agents will quote prices for comparable properties that have sold with the same bathrooms and bedrooms. However, they conveniently make no mention about the interior condition, construction quality or even the aspect.
Selling agents tend to quote prices for comparable properties that have sold 12/18/24 months ago. Time is of essence and the market has changed during such a period!
Buyers are vulnerable due to the lack of selective comparables that appropriately include hidden factors such as the slope of the land. Example: If the comparable is a level land and the one you are looking at is sloping, then it is not really a comparable because of this important difference!
You are considering say a three-bedroom with a study (which some agents would conveniently advertise as four bedrooms). It should not be compared to the sale of a property that is actually a full four-bedroom one. Depending on the suburb and type of property, a bedroom can be worth up to $100,000!
You make money when you buy! Remember that.
Most people don’t have nor can they access this level of detail.
The difference between “comparables” prices and a fair market price can be tens/hundreds of thousands of Dollars, depending on the type of property and/or suburb.
Generally speaking, there are at least two distinctive price pockets in almost every suburb – “good side” and the “not good side”. You must ensure when presented with comparable properties, they are in the same side of the property you are considering to buy! Few hundreds of meters can make all the difference.
Buyers put too much trust in real estate agents than they should. The agent is working for the vendor. It is their fiduciary obligation. It is their duty to get the best outcome for the vendor. Most of them are friendly to the buyer but really they are only interested in the best outcome for their vendor.
If you are relying solely on their comparable properties, then you are off the mark or more commonly known as over paying.