9 tips to get a realistic market appraisal
We have sympathy for home owners looking for an estimate of their property’s current value. There’s a common concern that you’re not getting the full story from real estate agents, and it’s hard to judge the validity of the info you’re receiving. For the most part we’re a hard-working profession but we’ve seen and heard enough over the years to understand why we’re treated with caution. The bad agents can be well wide of the mark with their market advice.
So if you’re looking to sell or want an accurate estimate of market price, here’s some quick tips.
1. Keep in mind that real estate agents cannot give you a “valuation”. To do that you need to be a licensed valuer so what we offer is a market appraisal. What’s the difference? One costs you approx $500 and comes with a detailed, written report that can be relied on by the bank and the stamp duty office, and has an insurer standing behind this factual statement of price. The other is free of charge, hopefully still well-prepared, but is an opinion only based on the agent’s experience in the market.
2. Keep in mind that licensing for agents is a lot simpler than the law requires for a registered valuer and there’s fairly minimal education standards. Many agents have only a basic knowledge of townplanning and body corporate impacts for example. Good agents do consider broad issues but some will miss the subtle differences between properties.
3. Pricing a property is not an exact science. A market appraisal is a more intuitive finding, based on our experience in marketing and selling similar property in the area. What will buyers like and dislike and what will they compare us to – recently sold and now for sale? This is where local knowledge is key but, even with strong local experience, in many sales campaigns we get buyer feedback that surprises us – some small positive or negative feature of the home that we’d hadn’t identified.
4. Since 2010 inner-Brisbane’s lower property turnover does make estimating more difficult. Recent, comparable sales are an important part of the appraisal. Accept that agents will need to give you a range, especially if your place is a little different to the norm.
5. Don’t be afraid to challenge the agent! Ask them why they included a property in the assessment and how it compared to yours. If they’ve spent time preparing a sound report they’ll be happy to explain it and you can quickly judge the depth of their market knowledge.
6. Beware the automated market report! The web has opened up enormous quantities of real estate information and some new online offerings include push-button market estimates. Using the property’s last sale and local trends it spits out a number in 30 seconds! In our experience most of these are not reliable. Not in the least. They don’t know about renovations, views, design, quality of finish etc, etc, etc. One major data company has a product that at least offers a margin of error with each estimate so you can assess its accuracy. (By the way, many banks are now using these to make desktop judgements on your home loan.)
7. Take an impartial view of your property (as best you can!) If you can have an open discussion with your agent and genuinely consider your home’s strengths and weaknesses you’ll come up with the most accurate pricing.
8. Do what your buyers will do. Set up an alert on the websites and visit open homes to check similar property, taking a good look at your competition. You don’t need to apologise for not being a buyer when you go into an open home – agents love to meet new sellers.
9. Be open with agents on how you will choose the person to represent you when you’re ready to sell . We know an owner wants to be lavished with praise for their home and for us to be super-optimistic about its price potential. But tell them it won’t be “biggest liar gets the job”! If you reassure the agents, whether you interview one or more, that you’ll choose them for their marketing and sales ability and not their promised price, you’ll immediately get a far more open discussion from all agents.
There is no doubt great agents do achieve better prices for their sellers. We’d suggest you spend plenty of time choosing the agent, placing your trust in someone who’ll respect it and will work hard for you to get that best price possible.