The Cheapest House Isn't Always a Bargain—Check This First

The cheapest house on the street is not automatically a bargain. A lower price can mean less land, hidden repairs or a completely different product — which is why comparable sales matter before you make an offer. → A WA client paid $487,000 for a four-bedroom, two-bathroom house on 640 square metres. → A similar four-bedroom house on 681 square metres had also just sold. → The comparison showed the property was fairly priced for its block, not cheap because it was defective. → The property now appraises at $950,000. → Use at least two nearby comparable sales, preferably three or more. → Match bedrooms, bathrooms and land size where possible. What this means for you: the cheap price is not necessarily the risk. Skipping the comparison is. Before calling a property a bargain, establish exactly what you are comparing it with and investigate why the price is lower. Free instant Street Score for any Australian address: https://ripe.house/streets Subscribe to Ripehouse Advisory for more data-led Australian property analysis. #AustralianProperty #PropertyInvesting #BuyersAgent #PropertyResearch #DueDiligence This video is general information only and not financial or investment advice. Consider your own circumstances and seek professional advice.

A suburb's cheapest house can still be a bad deal. It might sit on less land, it might need expensive repairs. I have been looking at how the gap between sale prices is changing across Australia, but that gap does not tell you how far a seller will actually negotiate. Let me show you one real example, then the checks you need before you make an offer. Here is the measure behind most of these negotiating headlines. Take the top quarter of sale prices in the suburb, subtract the bottom quarter, divide by the middle price. That tells you how wide the middle of the market is. It tells you nothing about asking prices, nothing about offers, nothing about what a seller will actually accept. A smaller house and a larger house can both be fairly priced. A loan proves nothing about how much room you have to negotiate. Here is a real property one of our clients purchased in WA. I'm not naming the suburb or the street to protect the client privacy, but every number here is real. The client paid $487,000 for a four-bedroom, two-bathroom house on 640 square metres. Another similar four-bedroom house on 681 square metres had also just sold. Both comparables matched on bedrooms and were close in land size. That comparison told us the price was not cheap because the house was bad, it was fairly priced for its block in a market the client understood. Today, that property appraises at $950,000. The cheap price was not the risk. Skipping the comparison would have been the risk. I do a comparison like this every week. Subscribe if it changes the way you consider investment. If my kid found the cheapest house in a suburb and got excited, here is the first question I'd ask. Cheap compared to what exactly? I walk through them like I did dad maps. Land size, condition, what repairs does it actually need? A low price next to a smaller block or a hidden repair bill is not a bargain. It is a different product wearing a bargained price tag. Would I let my kids buy the cheapest house on a street without that check? Absolutely not. Cheap and a good deal are two different questions. Only one of them is being answered by the price tag. Before you call any price a bargain, find at least two real comparable sales nearby. Preferably three or more. Match on bedrooms, bathrooms and land size where you can. Check why the price is lower. Sometimes it's a genuine opportunity, sometimes it is a warning. The only way to tell the difference is the comparison, not the price alone. Check your own street for free. No sign up required. The link is below. A cheap price and a good deal are not the same thing. Always run the comparison before you run the number. This is general information, not personal financial or legal advice. Speak to a licensed professional before you make an offer. See you next week.