‘DESPERATE’: WHY YOUR HOME APPRAISAL MAY BE WRONG

How do you work out the value of your house? One way is using a valuer, but a valuation costs money. Experience tells me that if the valuation comes in at more than you want, you’re happy to accept it. But if it comes in less than you expected, most people justify its ‘pessimism’ by saying things like ‘valuers are always conservative’. The other way of course is real estate agents. They are free and accessible. But a real estate agent knows most sellers will use the ‘appraised price’ to determine whether or not they get the job. It’s a dodgy practice in the industry to ‘over appraise’ a property. Most experienced agents don’t want the agro of ‘over appraising’ so they go with a realistic approach. They look at recent sales, sprinkle in current market conditions and then reflect on the buyers they have been working with. Recently, I met with a client that had an agent tell them a price more than they thought they would get. Then that agent offered them a commission less than everybody else in the market. They were translating this into enthusiasm and optimism, but really it was inexperience and desperation. If a home is overpriced then it won’t sell, and the longer a property sits on the market, the lower it sells for. To work out your value look at the sold section of realestate.com.au and go through open homes of similar value to yours and find out what they sell for.