I’ve been down this path before, but I think it is important enough to go down again. With the wrong or incorrect advice, it’s possible for a property owner to either sell themselves short or, as sometimes can almost be worst, be given false expectations and find themselves on the market for many months or even longer.
The legislation that real estate agents and sales people operate under is quite specific in relation to market appraisals and an agent is not allowed to receive payment for them.
A market appraisal is not a valuation, and a valuation can only be conducted by a registered valuer.
Registered valuations are usually under the instruction of a bank or lender for finance purposes and as such they err on the side of conservative.
Invariably the instructions will include a requirement to value the property at a price that the property would sell at within a very specified period – usually no longer than six months and more often three months.
A market appraisal, on the other hand, with the use of past sales information should give a very fair indication of what the market at the time of the appraisal may pay for the property.
It’s necessary for an agent to find recent sales information (within six months), of at least three properties that are comparable to the subject property and within five kilometers.
This is not so easy on the Range and often older sales information and/or greater distances are involved. And, in some circumstances with very unique properties no comparisons are available.
According to the legislation any variation between the comparisons used, requires a detailed written explanation from the agent.
I can’t stress highly enough that the comparisons must be truly comparable and/or a detailed written explanation of how the Agent arrived at their conclusion must be provided to the property owner.
John Taylor
(23 years Range Real Estate experience)
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