RES Articles

Sometimes getting the apprised value of a house is incredibly hard. After all it really is just an educated guess when it comes to appraising the selling price of a house. Not to long ago I had a client that had a semi-rural property for sale. I knew that it would be hard to price, so I had 4 local agents inspect the property and make a submission. I usually find 3 submissions is adequate but this one looked a bit tricky, and I wanted to get as much local intel as I could get. The suggested selling range between the 4 agents differed from 1 million dollars to 2.1 million dollars. We knew that it was safe to say the 1 million was too low and that the 2.1 million was too ambitious. The property was bought 8 years prior for $600,000 and the market had roughly doubled it that time plus the owners had added arguably around $100,000 in value. To cut a long story short we advertised the property at the higher end of the appraised amounts, with a game plan to bring the price down if there was little buyer action. The property ended up selling for $1.8 million dollars after about 8 weeks. Based on the purchase price and market movement this was a great result.

Potential sellers get really frustrated when agents can’t commit to a suggested selling price. After all, shouldn’t the agent be the expert? It sounds like a cop out, but pricing properties is really hard. Unlike most other products (new cars are a good example), in general each house is different. Even townhouses that look the same can have vastly differing appointments, different aspects and ware and tear can change from one to another. Now consider a four bedroom house being compared to up the roads four bedroom house. One might be freshly renovated or just better cared for over the years. It could have a bigger yard, extra living area, the potential list goes on and on.

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Something else that can change even from a sale that was made two months ago is the buyers on the market. Maybe one house sold higher for a specific reason. For example, its zoning, or its potential for changes like the ability to build a second property on it. Not to mention that one buyer may overpay for a house because it’s close to the grandkids. There is a myriad of reasons as to why houses can differ in price.

My suggestion is to do as much research as possible and don’t just rely on one recent sale. Also, when real estate agents value your home, they should be able to point to at least three other properties that are similar to yours that they have used as evidence to justify your price.

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Having said all of that, it is my belief that when you are considering selling your home, base your figures on the conservative side of the valuations and certainly don’t choose an agent solely based on them giving you the highest valuation. It is more important to speak to any potential agents about how they can get you the highest possible price and how they intend to do this.