When it comes time to sell your property, what are the ways you can find out its worth? What are the best ways to ascertain how much it will sell for?
There’s three main ways, and each have things in their favour and things against.
1. Online valuation tools
This is a computer-generated property valuation based on similar recent sales in the area after you punch in information about your home such as address, number of bedrooms, bathrooms and so on.
This method is quick and cheap or free, but can lack specific accuracy. The computer-generated valuation can’t take into account specific differences between your properties and the ones it compares it to and has no sense of how buyers are behaving in the market or the level of demand in the market.
2. Valuation services
Banks normally require an accredited valuation to approve a home loan, which is the most common use of these services. But there’s no reason a seller can’t use one either to get their sale price right.
Valuers are independent so will give an objective, unbiased valuation of your property based on a range of factors such as size, condition, features and location. They are obviously more detailed, thorough and probably more accurate than the online valuations.
With the greater level of accuracy comes an increase in cost. They start at around $250 and while they give a good valuation of what a property is worth in terms of bricks and mortar, they don’t take into account current buyer behaviour in the market or subjective elements such as unique features.
In an nutshell these valuations are tailor-made for bank mortgages and insurance purposes, but can lead to valuations that are below what your property can achieve in the market.
3. Real estate agent appraisals
This is where a local real estate agent with extensive knowledge of your area comes out and gives an assessment of what they think your property can sell for. They base this on their local market knowledge, the uniqueness of your property, the current market demand for similar property and recent sales.
Real estate agents often provide this service for free and the best agents have an excellent idea of the market conditions, and incorporate buyer motivations in their estimate of what your property can achieve in the market.
The downside to this type of appraisal is the chance you pick the wrong agent. An inexperienced or dodgy agent can give you an unrealistic estimate. And although it’s free and no-obligation, the agents are hoping to ultimately be the one you select to use to sell the home. So it’s important to select a good agent with excellent local knowledge that you trust.