How to value property before you make an offer

Start with what similar homes have sold for. Then check how the property you want compares on land, location, condition and the things you can’t change. That gives you a price range you can explain, rather than a number borrowed from the listing.

The next question is whether the loan will work at that price. You might be willing to pay $700k, but if the lender values the home at $670k, a loan capped at 90% would fall from $630k to $603k. That’s another $27k you’d need towards the price, before LMI and other buying costs. I’d check that gap before committing your savings.

This guide takes you through 4 research steps, the tools you can use and the checks that matter before you commit. The same approach can help if you're selling, refinancing or working out how much equity you could use for another purchase.

Open the sold section of a property website and search the address or suburb. Begin with homes sold in the past 3 to 6 months, then narrow the results to the same property type and nearby streets. Recent sales show what buyers and sellers agreed to. An asking price shows what a seller hopes to receive.

For a detached house, start with detached houses. For a unit, begin in the same building or similar nearby buildings, then compare size, level, parking and levies. A townhouse with its own entrance and outdoor area may attract different buyers from an apartment with the same bedroom count.

Aim for 3 to 5 useful sales. You can widen the area or date range if the home is unusual, but record why each more distant comparison belongs in your research. A sale across a busy road or outside a school catchment may tell you less than one further away with the same appeal.

Use realestate.com.au sold results and Domain sold results to find listings, photos and available sale prices. Some results show that a home sold without disclosing the amount. Ask the agent whether the price can be confirmed, or leave it out of your price calculation until you have a reliable figure.

A property report can help you pull together sales history and nearby comparisons. Ask us about a report when we're helping with your loan. You should still inspect the details: a database can have an old bedroom count or photos taken before a renovation.

Here’s a worked example of 3 similar houses. Assume the home you want has 3 bedrooms, an older kitchen and a busier road position. The figures below show how to organise a comparison; they aren’t reported sales.

On those details, I’d start with House C and investigate what could justify paying more. I wouldn’t average the 3 prices or treat the $20k gaps as a fixed value for a kitchen or a quieter street. The rest of the property still matters.

Download our comparable-sales worksheet and start in Simple Check. Record the sale date, source link and the differences that matter. If a detail is unknown, leave it marked unknown until you can check it.

Now walk through each sale as though you were choosing between it and the home you want. Would you pay more for one? What would you be getting for the difference?

Land size matters, but usable land matters too. A steep block, difficult driveway or easement can change what you can do with it. A smaller, level block with good access may suit a buyer better than a larger block that needs expensive retaining work.

Look at accommodation in the same way. An extra bedroom is useful if it works as a bedroom. A room with awkward access, poor light or unresolved approval questions may not compare with a properly designed addition. Check the floor plan to see whether the room will work for you.

Visit at different times if you can. Traffic at school pickup, parking on a weekday evening and noise near a railway may be very different from a quiet Saturday inspection. Check how you would actually travel to work and where visitors could park.

For Brisbane properties, use the council information behind our FloodWise property report guide. Get an insurance quote for the address as well. You need to understand the ongoing cost before comparing it with a home that has different flood exposure.

Our property market research process takes you through the wider suburb checks. Use those findings to choose better comparisons, rather than assuming every home in one suburb moves together.

Dividing the sale price by land area can help you spot a result worth investigating. It can’t tell you what the house itself contributes. Two 600 square metre blocks may contain a renovated family home and a house needing major structural work.

For units, check whether the advertised area includes balconies, storage or parking before comparing the figures. Different measurement conventions can make one apartment look cheaper even when its usable living area is smaller.

A good comparison explains these differences. An average of several unrelated sales simply hides them.

You don't need to invent a fixed dollar value for every bedroom, pool or new kitchen. Start by placing each comparable above or below the property you're assessing and explain why. Then look for another sale that helps you judge the size of that difference.

For example, if the closest sale has a renovated kitchen and bathrooms while your property needs both, it may support the upper end of your range rather than your starting offer. A renovation quote helps you plan your budget, but the amount an owner spent doesn’t automatically become extra market value.

The following checks can change both your offer and the cash you need after settlement. Raise them with the appropriate inspector, solicitor or council before relying on the property's apparent potential.

An easement doesn’t mean every proposed improvement is impossible. Equally, a deck that looks finished doesn’t prove the approvals are in order. Get the specific restriction or missing approval checked before assigning value to the feature.

Look at the sinking fund or capital works fund, insurance, recent minutes and any proposed repairs. Lifts, pools and shared facilities can suit your lifestyle, but their maintenance belongs in your budget. Ask about defects, disputes and special levies through the body corporate records process.

If several similar apartments are for sale, compare their condition, outlook and asking prices with actual recent sales. Extra listings give you alternatives; they don’t prove prices must fall. Some lenders also restrict particular building types or locations, so send us the address before relying on a small deposit loan.

Send us the floor plan, building address and details of any body corporate issues. A lender may look at internal floor area, the number of units or storeys, and how many properties it already finances in the development. Its postcode rules can matter too.

Check whether the quoted floor area excludes balconies and car spaces. A studio or serviced apartment may also be assessed differently from an ordinary residential unit. A listing’s total area won’t necessarily tell you whether the property meets the lender’s size requirements.

A lower lending limit means more cash needed even if the asking price looks reasonable. The Macquarie guidelines give one example. Send us the building address and floor plan so we can check suitable lenders before you rely on a small deposit.

Flood exposure can also affect whether a lender accepts the property and how it values it. Send us the FloodWise report and get an insurance quote for the address while you’re checking the purchase costs.

Bring the strongest comparisons together. Identify the lower and upper prices you can support, then explain where your property sits between them. Give more weight to a close, recent match than an unusual sale with several adjustments.

Suppose the relevant sales sit around $760k to $800k. That range alone is not enough. If the $800k home is substantially renovated and yours needs work, explain why it belongs nearer another comparison. If the cheaper sale has a major location disadvantage, record that too.

You can then set 3 separate numbers: your opening offer, the price you'd be comfortable paying and your absolute limit. The last number also needs to fit the loan, buying costs and cash you want left over. Our guide to negotiating the house price shows how to use that research with the agent.

If your best comparisons are several months old, look for more recent results and ask agents about completed sales that have not yet appeared online. Avoid adding a percentage just because a national headline says prices increased. The change may differ by suburb, property type and price bracket.

Days on market, price reductions and the number of competing listings can add context. They are reasons to ask questions, not a guaranteed discount. A home may have taken longer to sell because of its price, presentation, title issues or a seller's timetable.

Online estimates are a useful starting point. They can help you find sales history or notice that an asking price sits well outside an estimated range. Their value depends on the data behind them, including whether the property's details and recent sales are up to date.

You can explore Domain Property Profile, OnTheHouse, Property Value and View. Use Microburbs for additional neighbourhood research. Features and access vary, so check what information a report actually includes before paying for it.

Compare an estimate with the property's real condition and your sold evidence. If 2 tools give different numbers, look for the reason: different sale dates, missing renovations or an unusual property may explain the gap. Averaging the estimates won't fix missing information.

Your research helps you decide what to offer. An agent appraisal helps set a selling strategy. A lender's valuation helps determine the amount it will lend against the property. These have different purposes, so you may receive different figures without one person simply being wrong.

If you need a valuation for tax, family law or another formal purpose, arrange the appropriate professional report with your adviser. A free online estimate or an appraisal prepared to sell a property may not meet that need.

Comparable sales are central to researching a typical home. Other approaches can also be relevant to a professional valuation, depending on the property and purpose.

An income approach considers the income a property can produce. A cost approach considers land and the cost of improvements, with appropriate allowances. Neither means you should set an offer by multiplying the advertised rent or adding every renovation invoice. Ask the valuer how the approach fits the particular property if you need a formal report.

For an ordinary purchase, lenders generally use the lower of the contract price and their accepted valuation to work out the maximum percentage they will lend. Family purchases at a discount and some older off-the-plan contracts can be treated differently. Your income, commitments and the loan's other conditions still need to support the amount.

Here is a $700k purchase with a loan limited to 90% of the accepted value. Buying costs are extra in both columns.

The valuation falls by $30k and the 90% loan falls by $27k. That’s another $27k you’d need to find towards the price before you could settle, plus any LMI and other buying costs.

The same applies at 80%. On an $800k purchase, a valuation of $750k reduces an 80% loan from $640k to $600k. The cash contribution towards the price rises from $160k to $200k: another $40k, before buying costs.

A discounted family sale is often called a favourable purchase. Some lenders can recognise the difference between the purchase price and their valuation as gifted equity. That may reduce the cash you need, but the lender still needs to accept the arrangement and confirm whether the discount is a genuine gift.

For example, suppose you buy a relative’s home for $700k and the lender accepts a value of $800k. If it permits an 80% loan against that value, the loan could be $640k, leaving $60k towards the price. Using 80% of the $700k price instead would mean a $560k loan and a $140k contribution. Purchase costs are extra in both cases.

Have the loan structure and family agreement checked before signing. A higher valuation doesn't let you borrow any amount you choose, and the discount isn't cash available for settlement bills. For Queensland duty, QRO generally uses the higher of the price and unencumbered market value, so a family discount doesn't necessarily reduce the duty bill.

For an off-the-plan purchase, tell us when the contract was signed and when settlement is expected. Some lenders can use a later valuation on older contracts, while others apply different limits. Check the treatment before counting a rise in value as part of your deposit.

Possibly, depending on the lender, property and your circumstances. It can change the interest rate, loan conditions and whether you pay lenders mortgage insurance. An eligible LMI waiver may help in some situations, but it doesn't remove the need for an acceptable valuation or affordable repayments.

We can check whether an upfront valuation is available for your proposed lender and property. Some lenders need a contract or evidence that you intend to buy before ordering one. If you're still researching, we can help with comparable sales first. Raise the valuation timing early, particularly if your savings leave little room for a shortfall.

The lender may use an automated result, a desktop review, an external inspection or a full inspection. You usually can’t choose the method simply because you prefer its result.

The lender’s ordering rules usually determine the starting valuation method using the property, location, loan size and purpose. If the first result misses important features of the home, we can check whether an inspection or review is available. We’ll explain the cost and how the new result would be used first.

If an inspection is needed, arrange access and make it easy to see each room and relevant improvement. Provide accurate plans, approvals or renovation details when requested. A valuation is separate from a building and pest inspection, so don't use it as a replacement for checking defects.

Ask us about the expected timing and any fee when the valuation is ordered. Location, property type and access affect both. If settlement is some time away, confirm whether the lender will need an updated valuation before funds can be released; there is no single expiry period for every lender and purpose.

If settlement moves, I’d check the valuation date before relying on the approved loan amount. These are Macquarie’s published checkpoints; other lenders have their own rules. Ask whether an existing valuation can be reused before paying for another one.

Start with the evidence rather than asking for a higher number. Send your broker the specific factual error or missing comparison so it can be raised through the lender's review process.

First, check whether that type of valuation can be reviewed. An automated estimate or desktop result may need a different process from a report based on an inspection. A paid inspection can sometimes be the next step, but it doesn’t guarantee a higher figure.

Ask whether the new report would replace the earlier result even if it comes in lower. Work out what that would mean for your deposit before ordering it, particularly if a finance deadline is close.

The lender may accept a review, request more information or keep the original figure. Another lender may use a different valuation process, but moving the application also means checking its lending rules, rate, costs and available time. Our bank valuation challenge guide explains how to prepare the evidence.

Prepare 3 strong comparable sales where you can, ideally from the past 6 months. The lender may set a tighter period or other review requirements. Explain why each sale is relevant; sending a list of higher prices without comparing the homes is less useful.

If you already own the home, the value accepted by your lender helps estimate how much additional borrowing may be available. It may be able to use an existing valuation or an automated assessment rather than order a new inspection. Start with its permitted percentage of that value and subtract your current loan balance.

For example, at an $800k value and an 80% limit, total borrowing would be $640k. Subtract a $500k existing loan and the difference is $140k. If you borrowed that full amount, your total debt would rise to $640k, so include the higher repayments in your budget.

The amount you can access also depends on your income, commitments, property and purpose. Read our home equity loan guide before treating a rise in value as your next deposit.

A few common measures can help you understand a suburb report. Use them alongside individual sales, because each summarises only part of the market.