You’ve had your property appraised by a real estate agent, and you’re delighted with their sales estimate – until your appraisal report comes back and it’s $ 70,000 less than the listed agent. So what is your property really worth?
You’ve had your property appraised by a real estate agent and you’re thrilled with their sales estimate – until your appraisal report comes back and it’s $ 70,000 less than the listed agent. So what is your property really worth?
It’s a problem that real estate agents face on a daily basis, says Michael Brock, president of the Real Estate Institute of SA (REISA), because many people don’t understand that there is a difference between an appraisal and an appraisal.
“A formal appraisal can only be performed by a qualified appraiser who has undergone prescribed training and education in this area, to ensure that they take into account all the characteristics and issues associated with a particular property.” , explains Brock.
“Assessment is a complex task and will take some time. “
A formal and professional appraisal undertaken by a registered appraiser will take into account several relevant characteristics of the property, such as:
- Location / aspect
- Structure and condition of the building
- Any construction / structural defect
- Characteristics of the house
- Warnings or charges on the property
- Local council zoning
Typically, you will pay between $ 3 and $ 500 for a professional assessment. For these charges, you will receive a written report detailing the property’s value, along with an explanation of how and why that value was determined.
Why do i need an assessment?
Appraisals are required in situations where a final value is required. “The reasons for this include a property settlement, obtaining financing from a lending institution or establishing the value of a deceased estate,” explains Brock. “A court may also order that an assessment be obtained as part of the dispute resolution process.”
The appraisals are purely indicative and can be carried out by real estate professionals.
“Valuations are estimated based on knowledge of the area and recent selling prices, and should never be used other than as a price estimate,” Brock said.
“They are not final and have no legal status. It is rare to charge fees for reviews and they are usually only requested by potential sellers to get an ‘idea’ of the local market.”
Why do i need an assessment?
If you are considering selling your home or investment property, an appraisal from one or more qualified real estate agents can provide you with an indication of what your property is likely to sell for.
Just be sure to contact real estate agents who are familiar with your suburb. A real estate agent who typically works in another area may not know the local micro-market as closely, and therefore may give you a much higher or lower valuation than the market can realistically support.
This was the case recently for Gold Coast owner Margaret, who is considering downsizing her home in Benowa now that her children have all moved out.
“The first agent we got was from Surfers Paradise, and he admitted he wasn’t very familiar with the area,” she says. “He valued it between $ 475,000 and $ 500,000, which was way less than we expected. The house next door sold for $ 540,000 a few weeks ago, and it’s almost identical to ours, except we have a pool!
She called two local real estate agents in Benowa, and they valued the property at $ 580,000 and $ 560,000 and up respectively.
“If we do decide to sell, we will certainly work with an agent who knows our area well,” adds Margaret.
This story was originally written in October 2010 and updated for formatting in June 2018