Why buying a property is more like buying a car than you think

Buying a property is a lot like buying a car and once you understand that, the whole process starts to make a lot more sense – bear with me, it will I promise.

When you’re inspecting a car, you don’t just look at the colour, make and model.

You also check under the bonnet, listen for noises and inspect for scratches or dents. If you find something wrong, like a dent on the door or a scratch on the rims, you don’t just accept it at full price.

You take that into account and negotiate hard for a discount.

The same principle applies to property.

As a valuer, one of the most common misconceptions I come across is that property value is purely about location and size.

While those are key components, the condition of the improvements, the dwelling itself also plays a critical role in determining market value.

Much like a car, a property is assessed not just on its overall appeal but also on the presence (or absence) of defects, risks and maintenance issues.

When a valuer inspects a property, we are not just walking through to analyse its layout or finishes, we are actively identifying any defects or risks that may impact its marketability and value.

These could include visible cracking in walls, deteriorating render, evidence of water and mould, uneven paving, a sloping fence line, or structural movement.

While many of these might appear minor to the untrained eye, they can influence buyer sentiment and in turn, the price achieved in the market.

This is where the concept of risk rating comes in.

Bank valuations at risk

Banks and lenders rely on valuers to assess not just the current market value, but also the level of risk associated with the property as security for a loan.

If a property has visible or potential defects, even if they are relatively inexpensive to rectify, it can raise the perceived level of risk for the lender.

This often leads to a more conservative valuation figure.

Essentially, the valuer is applying a discount, similar to how you would expect a price reduction if a car had a few scratches or a faulty indicator light.

In real-world property transactions, however, the effect of these seemingly minor issues is often magnified.

While a crack in render or a wobbly back step might cost only a few thousand dollars to fix, buyers can use these as negotiation leverage to push the price down by tens, or even hundreds of thousands of dollars.

Buyer psychology plays a significant role here.

When a purchaser sees visible defects, it can trigger concerns about the overall quality or structural integrity of the property, even if the issues are superficial.

This is why I strongly recommend that home owners obtain a building and pest inspection before listing their property for sale.

Knowing exactly what defects or maintenance issues exist allows you to address them proactively.

Fixing the problems before going to market ensures that buyers have fewer reasons to negotiate the price down. It’s a small investment that can make a significant difference to your final sale price.

Think of your home’s market value as a cup filled with water. Every defect, crack, or maintenance issue slowly drains that water, or the value, from the cup. By repairing and maintaining your property, you’re effectively keeping the water level high, protecting the market value.

Higher property sales price

From a valuer’s perspective, a well-maintained property not only achieves a higher value but also presents as a lower-risk asset to banks and lenders.

It signals that the owner has taken care of the property, which typically means fewer unexpected costs for the next buyer.

In contrast, a property that shows visible signs of neglect, even if minor, suggests potential unknowns and in valuation, uncertainty almost always equates to a lower figure.

In short, whether it’s a car or a house, condition matters.

The more you can do to present your property as turnkey ready, the less opportunity buyers have to discount its value.

Pre-sale inspections, regular maintenance and prompt repairs all help to rev up your property’s value.