Providing advice on value is one of our primary roles as sales agents, but it’s also one of the most difficult.
Why? Because it’s an art, not a science, and we sometimes get it wrong.
Even with supreme market knowledge, the best data, and the accrued experience of walking through thousands of homes, all we can do is provide a well informed estimate.
What most vendors don’t fully understand is that our opinion of value, while important to know, does not actually influence the market value.
Recently we sold a property for over $4,000,000, which we had valued at early-to-mid $3,000,000’s.
It certainly didn’t stop us from achieving $500,000 above expectation.
Our job is to maximise price, not forecast it.
When it comes to real market value – particularly for an auction sale – the following opinions of value should be treated with a healthy amount of rational scepticism, because they don’t actually impact the market value.
Our opinion or the opinion of other agents… “But ABC Realty said we would get $3,000,000” does not help get a buyer to the table.
The vendor’s opinion… Nearly all of us think our property is better than it actually is. It’s human nature. Just like I think my four-year-old is the prettiest and smartest girl at her kindy. (She actually is though).
The opinion of the vendor’s well-intentioned family, friends, or neighbours… Of course they are hoping you get an unrealistically high price! It’s their vested interest.
A recent bank valuation… The bank is not going to buy your property. Historically, bank valuations were conservative, but this is no longer the case. We regularly see bank valuations well above market value.
Ultimately, the only opinion that really matters is that of the buyer(s).
Buyers vote with their feet.
A great house that looks to be great value online will attract 50, 70, 100 groups through the door.
A great house that looks very expensive online will languish with only a handful of buyers inspecting the all-important first week.
A great house that represents value will sell under competition.
A great house that is overpriced will not sell.
Only the buyers get to decide whether your house is the former or the latter.
Only the buyer’s opinion matters.
The good news is that as agents we can influence buyer’s opinions.
We can provide the best advice around strategy, timing, presentation and marketing to engage the right buyers.
We can convince buyers to inspect a property that they may have otherwise dismissed.
We can create a competitive and transparent environment that ensures that buyers have the confidence to put their best foot forward.
When it comes to price, the best agents under promise and over deliver.
What we say is far less important than what we do.
Feature Property: 3 Millicent Avenue, Toorak
David Sciola 