The moment a real estate agent offers a prospective price for your property is filled with both anticipation and anxiety.
Most owners have pretty firmly held views of their own on what they think their property is worth. But the rubber really hits the road when agents give their expert assessments.
Agents use a mixture of research, experience and current market sentiment to provide their guidance. Agents also base their estimates on their confidence in their sales and marketing campaigns to get better than expected results or alternatively to achieve a very quick sale. That’s why you’ll often receive differing estimates.
If these variations leave you confused, focus on how each agent says they will sell your property – are they recommending a private negotiation sale, auction or another method? Each agent should discuss basics with you such as likely buyer segments and how they will reach them through their marketing and advertising.
To help you understand this in more detail, below are the critical factors that influence the biggest question of all – “how much is my home worth?”
- The condition of the building is critical. Homes with peeling paint, dripping taps, brown stains on the ceiling rarely command a premium price. Homes that do not present well will be in the lower range of any agent’s estimate.
- Location is a critical influence. Agents will compare your home with those that have sold in the suburb recently. But not every four-bedroom house or two-bedroom unit is the same. Don’t assume that the price achieved by a similar home will automatically be reached for you. Ask your agent to explain the factors that they think will affect the price.
- Current competition in the market is a significant influencer. This is basic supply-and-demand economics. If the area is flooded by properties similar to yours, that over-supply will potentially dampen your price. But if you have the only three-bedroom property for sale in a 5km radius, expect buyers to fight over you.
- First impressions always count. It’s much easier to sell a home that has lovely gardens or is well presented and has street appeal.
- Modern homes tend to be valued higher by buyers because of their design, condition and lower maintenance costs.
- Homes that are conservatively decorated will do better than those that express the owners’ artistic side. Buyers pay more for homes that they can see themselves living in. Neutral is the way to go when selling.
- Being open to staging a home by using a consultant and hiring bespoke furniture to present it in pristine condition is likely to boost an agent’s price estimate.