Buying a House: Market Prices
Research real estate pricing and market information.
Before consulting a real estate agent, try to gather information on your own first. It is important to have a certain price image. However, be careful not to have an overly preconceived image, as this image may be incorrect. Once you have a general image, consult with a real estate company about specifics.
Point 1: Find out about pricing information for a specific location.
Transaction examples and other price information that can be used as a reference for knowing the price of real estate that is to be bought or sold ("subject property") are not easily obtained. The table below shows individual price information that is relatively easy to obtain for each property type.
*1 Please note that these are the prices assessed by public institutions and not the prices at which the properties were actually traded.
*2 Since these are selling prices, they may not necessarily be the same as the prices actually traded. Please use them only as reference information to grasp the approximate market prices. In general, it is said that the difference between the asking price and the actual transaction price is not as large for newly constructed properties as for existing properties.
How to look up price information for a specific location
Point 2: Find out about market trends in your region.
Information on average market prices and trends such as price increases and decreases in each area is relatively easy to obtain. By examining this information, it is possible to grasp the approximate price range and fluctuation of each area, which can be used when considering the details of the preferred property (target area, price range, etc.) and budget. This information can also be used to correct the price information of a specific point in the past to the current price according to the rise or fall of the market (point in time correction).
You can examine published market trend information by type of land, new condominium, used condominium, and single-family home. It is also effective to ask for overall market information from a real estate agency that is well-informed of the area.
How to research market trends in each region
Check the market trends such as average prices, average area, and number of properties in each area.
Point 3: Why it is important to know the market price
If you are aware of the market prices, you can determine whether you need to revise your purchase plans and preferred conditions. For example, if you find that the market prices in your desired area are higher than your budget, you can review your preferred conditions by widening the area you are looking in or by looking for used houses as well as new houses. You can also get some idea of whether the property you are considering is relatively expensive, market-rate, or inexpensive. Ultimately, it is the buyer himself/herself who decides the purchase price. In order to make a wise decision, it is very important to have a grasp of the surrounding market prices.
Arrows International Realty Corp.