With new underquoting reforms coming into effect in NSW this year, as agents it can be more stressful than ever to come up with an estimated value on a property. If it isn't as much as the vendor wants your job can be in jeopardy and if you over estimate you can be in a very awkward position with both vendors and buyers come auction day.
Today we have outlined three ways you can effectively justify your valuations to vendors and convince buyers as to what a property is really worth.
1. Use data to your advantage.
One of the best tools you have as an agent is access to huge amounts of data. This can show prices for comparable properties, as well as other factors that influence and add up to a property’s worth.
As an agent you need to explain this data to vendors and buyers in a relative sense to prevent misinterpretation. For instance, if a neighbouring property sold for a specific figure and your vendor thinks they can get more, draw on the relative size comparison, covenants and ensure like is being compared for like to develop a fair estimate.
Websites like Your Investment Property, Property Value and onthehouse.com.au can be such valuable tools for showing clients the statistics and sales data to substantiate your valuation, especially if they disagree with the price.
2. Create interest by highlighting the property’s best assets.
Part of what you need to show the true value of a property is market interest. If you have more than one buyer in the market you’ll achieve market value as the two will work to outbid each other, with one bailing out at the point the house goes over what they perceive as its maximum worth. This sets the market price.
However, to achieve market value you need to acquire two or more highly motivated bidders. In order to do this, ensure the home is staged to perfection, its kerb appeal is on point, it’s clean and tidy, and marketed well. Also upon your first inspection jot down three unique features of this property, such as its brand new luxury kitchen appliances, recently restored bathroom or its proximity to a good school. Use your three unique selling points in the property ad and be sure to highlight them in your sales pitch at inspections to drum up maximum interest.
3. Convenience is king.
With traffic congestion in capital cities seemingly worse than ever, living within close proximity to public transport, school, shops and other amenities is a major priority on homebuyer’s wish lists. If your listing is within a highly walkable suburb factor that into your valuation of the property’s value and what that convenience will be worth in the day to day lives of potential buyers.
When deciding on an asking price showcase your listing’s walkability to vendors and more importantly buyers using the neighborhood’s walkability report and the particular address’s walk score from walkscore.com.
A Walk Score is a rating out of 100, where 100 is a walker’s paradise and daily errands don't require a car. It's calculated by analysing hundreds of walking routes to close by amenities (like shops, schools, cafes, public transport or bike tracks) where amenities within a five-minute walk get maximum points and those within 30-minutes walk receive no points.
4. Go on facts, not emotion.
One of the biggest reasons people don't understand what their property is worth is because they attach considerable emotional and sentimental value to their home. They believe the weekends they sacrificed painting or landscaping the garden are worth much more than if they outsourced it.
It's essential you explain everything as 'matter of fact' as possible. You must clarify to vendors that if this cost was outsourced, how much it would cost and the real value their work (if any) has added to the resale price. This will ensure that the property is sold for its best and most reasonable price, not for the memories that were made there. If you try to get a price for the value the owner places on their memories and life there, you may never sell!
When it comes to valuing a property always back up your estimate with comparable property data, base it on the level of market interest out there, use suburb specific stats and remember to keep emotion out of the equation.
From the Homely Team
Homely is a new way to search for real estate for sale and properties to rent in Sydney and across Australia. With over 330K listings and 500K local reviews and insights, Homely is a faster and easier way to search for property to buy and rent in Australia.
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