Buy low, sell high – it’s the age-old stock market strategy and applies to any commodity, including real estate.
It may seem simple in principle but the intricacies of the property market can deter many prospective homebuyers who are concerned with making the wrong move.
In reality, if you are buying and selling at the same time, the figures might not matter as much, particularly if you’re operating in the same area.
According to Ray White Aldridge & Associates Principal Nigel Aldridge, the danger is sitting on the fence too long – because it’s hard to pick the bottom, and it’s hard to pick the top.
“The market works on a kind of a micro and macro basis,” he said. “If you’re buying in the same suburb or the same area – if you’re buying and selling in the same market – dollars are essentially the same.
“As opposed to, if you sold and then you sat on the fence for a while and the market moves, you’ll be paying more money.”
For example, if the market moved 10 per cent, you may get 10 per cent more for your property, but then pay 10 per cent more for the one you are buying, thus balancing out, according to Mr Aldridge.
“At the end of the day, most buyers don’t need to get things at the cheapest possible price – they just need to know they haven’t paid too much,” he said.
“The key is to go with your gut feeling, really.
“Do some research, find out what prices are like, visit home opens – do all those things. Give yourself the facts, so that when you make a decision you are buying in the market at value.”
Both sellers and buyers have access to more information than ever before, which is useful for looking into trends and property history.
However, there is such a thing as too much research, where you run the risk of paralysis by analysis, according to Mr Aldridge.
“You can overanalyse and come to the position when you really just confuse yourself, and in my time in real estate, I’ve seen a few people do that,” he said. “The problem with real estate is we’re not selling a product that is duplicated.
“Every product we sell is a unique product, so it’s hard to assess that in real terms of value.
“If something is good, there will be more people willing to pay for it, and competition is what pushes prices up.”