Pitfalls in valuing properties for sale

Pitfalls in valuing properties for sale from Geoff Grover - Coolum Beach Real Estate

By: Geoff Grover - Coolum Beach Real Estate  26-Oct-2012
Keywords: Beachfront Real Estate

With all the information available on past sales and for sale properties, this sounds easy. We now have agents with no area experience offering valuations and even have banks spruiking online valuations, but BEWARE!. Basing valuations on this raw data alone, eg, no of bedrooms, bathrooms, living rooms, block size, etc is only the basic beginning of valuing a home. These valuations make little allowance for property ambience, room sizes & layout, style, quality of finish, fittings or landscaping, interior light, etc, etc, etc. A client reports taking advantage of an NAB offer & received an 11 page report chock full of sales history for the suburb covering 218 sales from $2.3 m to $210,000 and included the property on market history in excess of $1m. It happens to have 7 bedrooms, 5 bathrooms on 1,126 sm block & NAB said “Probable Value Range - $415,000 to $475,000”. Now this is an extreme example, but illustrates the point. Auctions invariably in this area and in this market gives only a skewed view of buyer price feedback as there is very limited acceptance of the process. This means the bulk of bidders are those seeking a bargain, cashed up to drive prices down and seeking a distressed sale, egged on of course by very price aggressive marketing by the agencies. You only need to look at some of the price outcomes to be convince dof this. The only way you will receive an accurate valuation is to talk to your area expert agent who will know the ins & outs of all comparable sales, which one had termites, which ones were financially distressed sales, those that were a wreck internally, etc. He/she will know this from having been in many of the properties, assessed all the photos online as part of ongoing competitive market analysis, spoken with buyers in the area who have been through open homes – this process is very time consuming but builds up a huge body of relevant knowledge – those agents who go everywhere cannot hope to offer such knowledge and rely on commission discounting or some sort of gimmick that does nothing to sell your home.

Keywords: Beachfront Real Estate

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