Buyers agents determine the value of properties for their clients on a daily basis. The funny thing that often happens as a buyers agent, is you are certain a property is worth a particular figure, but someone else values it $150,000-$200,000 more. Why would someone else be so willing to pay so much more than the market value for the same property?
What we forget to remember is buying property isn’t always straight forward. These types of buyers who spend more than market value typically fall into two categories. The first is the emotional buyer. The second is the optimistic buyer. The emotional buyer will pay whatever they need to buy the property. This may be related to getting into a specific school zoning, having a short commute to employment, being close to family or friends and a long list of other reasons. The optimistic buyer is looking to add value to the property including large scale renovation, zoning changes or construction. Many times the optimistic buyer will be totally fine with spending hundreds of thousands of dollars over market value as they are sure, they will achieve an even higher re-sale price once their work is completed.
Are property prices the numbers quoted in the media or are they a bunch of stories relating to everyday Australians needs and wants?