How do I work out market value so I don’t overpay when buying real estate?

Some tips from the experts about how to work out what you should be paying for your new property

“Market value” is whatever a willing buyer will pay for a property when it sells.  While this advice doesn’t help new buyers, or even experienced buyers, there are ways to work out what you should pay for a property. Here are our tips:

Use technology:  Many real estate websites provide suburb median prices and recent sales details. Remember that a median price is only indicative of the middle price in a suburb; it may not reflect the value of the property you are considering.

Ask real estate agents:  When buying an investment property, rental returns are the key factor in determining value. 5 per cent gross rental return is considered the ‘rule of thumb’ which essentially converts to $1 in weekly rent for every $1,000 spent buying a property

Obtain a valuation: Formal valuations can cost between $500 and $1,000 but a licensed valuer must support his or her indicative price with solid comparative market evidence