Tips on How to Buy Quality Property Under Market Value

In recent years, Australian property prices have skyrocketed and there are fears the property market bubble will burst. But where does that leave people who want to buy a home?

Buying a property under market value is a great way to get a good deal on a property. It is an excellent strategy for making investments that will help you grow your wealth and create a real estate portfolio that has the potential to earn you money over time.

It is important to note that buying a property that is ‘under market value’ is different from buying a property at a discount. Some properties would be sold for less than the original asking price, but still within their market value — hence a discount. Buying under market value, however, refers to a property sold at a price lower than its perceived market value.

If you want to be able to buy a home for yourself or your family, it’s important that you know how to spot the top real estate deals — but it can be frustrating if you aren’t sure where to start.

Here are some tips on how to buy quality properties under market value:

• Be clear about your goals
• Do your research
• Work with an experienced agent
• Know what kind of properties are available and how much they cost
• Negotiate effectively
• Be ready to transact

Be clear about your goals

First and foremost, consider whether or not this is an investment strategy or just a good deal. If it's an investment strategy, make sure that your decision-making process is solid before making any purchases or investments.

Are you an investor looking for something cheap to renovate and rent out? Or are you a buyer who wants to live in the home themselves but doesn't want too much hassle? Many people make poor decisions because they don't have enough information about their situation or the market at large, so be clear with your objective.

Do your research

It’s not easy to determine the value of a home or property, especially for first-time buyers. In order to have an idea of how much a property in certain suburbs is, you can start by exploring online property listings or visiting open houses.

Compare their prices based on location, property type, amenities, and the condition of the property. Once you’re able to analyse and understand the market, you can now identify an opportunity when it presents itself and be better-placed to take advantage of it.

Not everyone has the time to do this, though, so you can consider looking for a reputable agent instead.

Work with an experienced agent

Experienced investors can easily spot undervalued properties, but as a beginner, it is best to seek the opinions and services of professionals. The first thing any agent has to understand is not only current market conditions but also buyer conditions.

An agent can help you find the right property and negotiate the best deal. All they need is some general information about your investment strategy, your current net worth, and how much money you want to put into the purchase of the property.

They will have access to certain deals that you can’t find yourself and guide you through the market in their area so that you know what to expect when it’s time to make an offer. If anything goes wrong with the transaction, they will make sure that it is handled quickly and effectively so that both parties walk away happy with their purchase.

It's important for you to remember that your real estate agent should be working for you — this means they will constantly be looking out for your best interests throughout the buying process.

Know what kind of properties are available and how much they cost

If there's an opportunity for real estate investing in your area, then this could be a good place for you to start building wealth! However, you must consider whether or not your financial situation will allow for this type of investment strategy.

Also, don't forget about taxes when purchasing properties under market value. They can take up a significant portion of your income over time, potentially meaning less money for other things like retirement savings or even paying off student loans.

Property investors who purchase properties at a discount have the potential for higher cash flow than those who don't — but only if they research the quality of the property and make sure it's worth what they paid for it.

Negotiate effectively

A good deal always comes from good negotiation with the seller. You have to understand why the property is for sale, as this will give you plenty of room to negotiate its price.

Is the seller looking for a quick sale to dispose of their asset at an acceptable price, or a long settlement so they can relocate elsewhere? Is the property free of any mortgage payment, bills, and any other financial obligations? These questions should be raised during negotiations to see if the property is worth it.

You don’t want to end up buying a property and be stuck with the problems left by the previous owner, negotiate the price as much as possible until you reach an agreement that is acceptable for both parties.

Be ready to transact

Everything we have discussed before this will not make sense if you are not financially ready to push through with the purchase.

Make sure that you have enough funds to pay for the downpayment or a portion of the property’s contract price. That’s why it is important to set a budget — you won’t be spending beyond what you can actually pay for, despite the discount you’ve earned from buying an undervalued property.

Also prepare the necessary documents, such as financial records and tax returns, to quickly obtain a loan and easily transfer ownership of the property. You have to keep in mind that you’re not the only buyer interested in the property, so be prepared to snap it up while the opportunity is there.

Conclusion

If you're looking to buy a property under market value, it's important to know what you're getting into. You are putting down a significant amount of money and taking on a lot of risk with regard to the price of the property.

You need to make sure that the property you're buying has a high enough quality rating and has been correctly valued by an experienced professional — both of which demand a certain amount of preparation and knowledge.

This strategy is not just a one-off chance to save money on a property. Buying a property that is under market value can be the launch pad of an impressive investment portfolio, the key to your retirement, or the very best way to house your family in the future.