Determining the value and sale price of your property is a crucial step in the selling process, and it is important that you set a realistic and achievable price for your property to avoid disappointment down the line.
So, how do you even begin to determine the worth of your property?
Unfortunately, the value of your home is not for you or your agent to decide, it all comes down to what the market is saying. To assess your home’s market value, both the land value and the building value needs to be taken into account.
Land value is usually easier to estimate as it is not affected by the same number of variables as the building value. Building value must assess everything from the structure to the property’s age, size and quality of execution, which often varies significantly from house to house.
Usually the following points contribute to the overall market value of a property:
The dimensions of the property;
The overall condition of the property;
Any special features;
The construction type;
Recent sold prices of similar properties in the area, and the asking price of similar properties currently on the market;
The potential for redevelopment; and
Any proposed re-zoning of the property.
There are a few options available to help determine the value of your property, so that you can set a realistic and achievable sale price. Below, we take you through three ways to give you an understanding of where the property market is currently, and how your home fits in the scheme of things.
Seek the opinion of a local real estate agent to give an appraisal of your property’s value and recommended sale price. Ensure that the agent’s expert opinion is based on their current sales experience and local knowledge, so they can be as accurate as possible in their appraisal.
The appraisal should also include:
Details of the title search;
Copies of the latest rates and tax notices from local government; and
General information on the community, such as the location of schools, shopping centres, transportation, freeway access and recreational facilities.
Both you and the real estate agent should be comparing “like for like” with other local properties up for sale or recently sold, in terms of location (within one kilometre is best), size, then condition and style of home. Otherwise the exercise is pointless. And if a divide between the “good side” and “bad side” exists in your neighbourhood, you should only be considering houses on the same side as you.
At Peard Real Estate, our experienced Sales Associates conduct free appraisals to help you determine the value of your property.
Property valuation is another tool that can be beneficial to you when figuring out the market value of your property. A professional valuation is advantageous as it removes the bias sometimes associated with appraisals done by some real estate agents who overprice your property just to win your business.
A professional valuer is usually hired by the owner of the property or prospective buyers, to give a more formal and authoritative report of the facts.
The reports are based on Landgate sales data and information obtained from real estate agents on recent sales in the area.
Property reports are another tool that can be of use to determine the value of the property. However, there are some limitations associated with property reports, so we don’t recommend using it as the primary source of your assessment.
Peard Group Managing Director, Maree Overton, stresses the importance of not relying solely on property reports.
“As the majority of information is sourced straight from Landgate it doesn’t always give you the full and accurate picture,” Ms Overton says. “The report is based on the historical sales information available, which may not reflect the current value of the property.”
“For example, if an older two bedroom home in Western Australia was purchased in 2006, then was demolished to build a modern, family sized home, this would increase the value of the property. This would mean that the original 2006 sale price would not reflect the current value of the property,” Ms Overton explains.
Therefore, if you are looking to assess the value of your property and determine the sale price, it is important that you do not solely rely on property reports to reach your figure.
Some people think that privately selling their property is the way to go, but we would suggest thinking long and hard about tackling a property sale on your own.
Real estate agents are a useful resource because they have a greater reach of cliental, are well-versed in their marketing strategy, and have the local sales experience to achieve a good sale price. By listing with a reputable agent, you can be sure that they are in your corner, working to get you the best result.
A good real estate agent will manage the marketing, home opens, follow-ups on interested parties, all to help you secure a buyer. With these things being taken care of, you save on your valuable time.
By considering all your options, including seeking a property appraisal from a local and experienced real estate agent, having a professional property valuation done, and considering how a property report could help you, you can ensure you’re making an informed decision about the value of your property.