Sales

How to spot an inflated property appraisal

A shorter time on market is important when trying to secure the best price and spotting an inflated appraisal will help keep the duration of the sale to optimal timing.

Do you know what your property is really worth? Here’s how to cut through the sales pitch to determine the true market value of your home in three easy steps.

Most real estate agents offer free property appraisals. This usually involves a visit to your home and a meeting with the agent. It’s a key first step to selling your property and gives you both a realistic idea of how much your property is likely to fetch on the current market, and an opportunity to start building a relationship with your selling agent.

However, it’s important to understand that many real estate agents use property appraisals as a sales tool. It’s simple. If I tell you that your property is worth more than it actually is in the current market, then you’re more likely to send the listing my way. In industry terms it’s referred to as ‘buying a listing’.

But that’s not good for either of us. Why? You’ll feel cheated when your home sells for less than its appraised value, which could come with serious consequences if you’ve gone ahead and purchased a new property based on the appraisal of the one you’re selling. And I’ll lose your repeat business and referrals as you learn the lesson of inflated appraisals and move on to another agent.

That’s why it’s so important for me, as your selling agent, to deliver an accurate appraisal of the value of your property that I know I can achieve in current market conditions. You can plan your next purchase with confidence, and I can build your trust as your agent of choice.

But how can you tell the difference between an accurate appraisal and an inflated one? Here are three ways to spot an inflated property appraisal:

 

1. Ask for a price range

The appraising agent should offer you a price range that accounts for market fluctuations. Instead, some agents will provide a single dollar value that they’ll argue is set in stone. Beware of this. They’ve likely settled on a number at the high end of the appraisal range and may struggle to deliver it in less than ideal circumstances.

2. Assess the numbers

Best-practice agents don’t just conjure up a number when appraising a property. Rather, they consider the unique selling points of your property and cross-reference it against recent sales data in your area and current market conditions. If the agent doesn’t provide a full report with their appraisal, ask to see how they arrived at the valuation. If they can’t back it up with solid numbers, go elsewhere.

3. Consider time on market

 How long does it take the agent to sell a property? If the average time on market of the properties they sell is high, you can bet they are inflating their appraisals and struggling to deliver on their promises. For example, at Pavilion Property our average time on market in 28.7 days, compared to an overall average of 104 days in our area. Agents who understand the market will sell your property faster and put more money in your pocket in the long run.

Find out what your property is really worth with Pavilion Property’s 15-minute property appraisal or call us now on (03) 5255 4444. 

DISCLAIMER

The following advice is of a general nature and intended as an opinion and broad guide. For all legal, financial or real estate advice should obtain independent professional advice to do with the specific nature of your circumstances before making any legal, financial or real estate decisions.