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Knowing what your property is worth is an essential step towards completing a successful transaction. Property appraisal is the process of analysing a home in order to determine what its real estate price is likely to be on the current market. This value is important because it can help you determine what the best listing price to attract potential buyers and to maximise your profits will be. Because there are numerous factors that go into property appraisal, it’s a good idea to use the services of professionals in order to get the most up-to-date market information.
Buying or selling a home can be emotional or even stressful, because it’s such a major financial transaction. Having the expertise of a professional real estate agent on your side can make a world of difference in how smoothly the process runs. Although there are many indicators that can help you place a value on your home, the most accurate and realistic figures will come from professional sources.
Using the Services of a Real Estate Agent
For those who have just decided to put a property on the market, getting a clear picture of what your home is worth is an important first step. Although there are other sources that could provide some insight, the most reliable and cost-effective source is a real estate agent. It’s a real estate agent’s profession to follow the current market and give an appraisal to indicate the value of your home. For best results, you’ll want to choose a real estate agent who has a strong working knowledge of your specific neighbourhood.
A local agent will not only know how houses are appraised in general, but they will also be familiar with the specific variables that will affect your home’s value. These could include the number of comparable homes for sale in your neighbourhood, how long these homes have been on the market and what the latest selling prices have been for comparable properties. A good real estate agent will have a finger on the pulse of what is happening in your local market and can use this as a guide to give you an appraisal. Because each agent will have a unique perspective, you may wish to get in contact with several local agents to discuss your needs.
Using the Internet as a Source of Information
Given that you are reading this article, you have obviously decided to use the internet as a general source of information. Reports from sources such as RP Data and Residex can give you general insight into property data, but remember that they are not a substitution for a professional’s assistance. The internet won’t be able to give you specific information about a property’s true condition and value in a way that a real estate agent can, nor will it have the kind of insider information that a local agent can give you. Many important variables that can affect a home’s value are only noticeable during an in-person inspection so online reports should only be used as a general guideline.
Obtaining Valuations for Legal Purposes
In addition to a market appraisal from real estate agents, there are other professionals who may be able to help you determine what your house is worth for legal purposes. Professional property valuers are independent parties who have no direct financial stake in a property’s sale. Their valuations are legal documents, so they can be used for negotiation or litigation down the road if necessary. There are a variety of factors that can affect the cost of this service: the type of home being evaluated, the format that is used and the reason for the report. A legal valuation report could cost as little as $300 (plus GST) in many Australian metropolitan areas, but bear in mind that this will vary depending on the factors mentioned above and the complexity of your situation. If you need a valuation report for non-legal reasons, these can be completed in a short time period for a standard urban or suburban home.
You’ll want to be sure that you choose a valuer with the proper qualifications. In many cases, your real estate agent will have professional connections with independent valuers and will be able to help put you in touch. Be sure that your valuer has specific qualifications attained via tertiary level studies along with a license or registration from the appropriate state body.
The Importance of an Accurate Valuation
If the house price has been set too high, you may not receive any serious offers. This could lead to your home being on the market for a longer time period, which may scare away further buyers who may believe that something is inherently wrong with the property. As well as thinking that there is something wrong with the home, buyers may bargain for a lower price or refuse to pay market value on homes that have been on the market too long because they (rightly) assess that the seller is desperate for a sale.
Yet there are also dangers in setting the bar too low; a low price could scare away buyers who may perceive that the property must have flaws or imperfections. A good real estate agent will be able to prevent both of these scenarios by helping you set the listing price as realistically and accurately as possible.
Factors that Affect Value
Factors such as your home’s square footage, the quality of fixtures and the number of appliances will all weigh into your property’s current value. However, there is far more that goes into this price. Your real estate agent will be able to help you compare your home to recently sold properties in your area, looking at further features such as the size of the lot, the home’s amenities and its location. Home improvements, upgrades, repairs or extensions could also add to the value of your property. If you have made any home improvements in recent years, be sure to let your agent know about these so that they can factor this into the appraisal. The neighbourhood itself will also factor into home values. Are there shopping centres, supermarkets, schools, parks, and hospitals nearby? Convenient public transport links and vicinity to metropolitan areas will all affect home values, as will crime rates and traffic levels. Lastly, it’s important to look at the current market in your neighbourhood; whether it is saturated, scarce or somewhere in between.
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