Sale - How do you judge the value of a property?

When it comes to judging a property to get a reasonable indication of its value and probable sale price there are three options you might consider.

First – a real estate agent can give an appraisal which is largely an educated opinion based on their current sales experience and local knowledge. This is informal but usually pretty helpful as an indication. Owners should be aware, however, some agents may over inflate the figure just to win their business.

Second – For a fee (around $400 and upwards) an owner or buyer can hire a professional valuer to produce a more formal and authoritative report. These reports are based on sales information held at the land and titles office in each state and from information obtained from real estate agents on recent sales not yet reflected in the government data.  Usually these are the reports which banks and legal bodies will accept as valid for lending and legal purposes.

 A professional valuation removes any perception that there might be any bias and is regarded as more independent. It must be noted that a valuer’s figure is usually on the conservative side. 

Third – for a small fee there is the option to pay for an online property report or computer generated valuation. However, people thinking of doing this should be aware there can be limitations to these reports.While that might sound quite reasonable, such reports can only be based on the unimproved value of the property since its last transaction.       

For example, if a property was purchased in 2016 and the owner demolished the old house and built a bigger one in its place, then this would not be detected by the data. The data only detects the 2016 sale price, even though the site now has a completely different value. It’s a similar situation if an owner puts in a pool, adds a second story or patio or maybe constructs a lock-up garage.

 These things are not readily detectable through an arms-length report based on data rather than being produced by actually sighting the property and being familiar with its history. Therefore the figures can be hugely distorted.

It must be noted that ultimately a property is worth what someone is prepared to pay. Either way, it pays to use the local services of those who know the neighbourhood the best. If you would like an opinion as to what your property maybe worth in today’s market please do not hesitate to give us a call.