How to get agent to give realistic valuation?

Discussion in 'The Buying & Selling Process' started by lettert, 6th Nov, 2019.

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  1. lettert

    lettert Well-Known Member

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    We've just sold a property for 20% more than what the agent valued it at - this was a private sale. I basically asked the buyer for a price based on bank valuation (just above the higher end) and after looking through similar property sales. [edit to add: we never listed the property with the agent, mostly because of his lowball valuation]

    I am thinking of selling another property soon, and this one will have to go through agent etc (and probably an auction). How can I tell the agent, "I expect this property is worth at least 1.5m. I am not going to sell for less than 1.5m."? My husband suggests I show him bank valuation (which would be around 1.5m, maybe just under) to drive my point home.
     
  2. Scott No Mates

    Scott No Mates Well-Known Member

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    You're low-balling yourself by relying on a valuation from the bank which is prepared for how much the bank would require to clear your debt to them ie for mortgage purposes not market value.

    Are you stuck with this particular agent? Interview a few agents and review their presentations, some will highball just to get the business then condition you to a lower price. They will provide you with comparable sales to establish a price.
     
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  3. lettert

    lettert Well-Known Member

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    Thanks Scott! No, I'm not stuck with any particular agent, I will definitely ask around. I'd rather an agent highball me haha - I have a lower limit (1.5) for selling, and we're not in a rush to sell.

    Ugh, I think the previous lowball agent just assumed he'd get our business since we've dealt with him in the past - but it was still super annoying!

    It makes me happy to think the bank is undervaluing just based on mortgage purposes - it valued at 1.4m (upper range) and the husband will only sell for 1.5 min, so might start the agent-querying process soon!
     
  4. MRO

    MRO Well-Known Member

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    Definately speak to several agents to get a range or prices and the reasoning. I am currently selling a property and the agent likes to price on the lower side for a quick sale. This works for them as a business (quicker commisions, less work, marketing as a quick seller). However I dont mind waiting an extra month (or two) if it means i can make an extra $50k. Hopefully getting a range of opinions about price and sales methodology will ensure you are listing at the right price for you.
     
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  5. The Y-man

    The Y-man Moderator Staff Member

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    @lettert The agent should be providing you with recent sales data for the area for similar properties - but really the only way to get a good handle on it is to attend as many auctions as you can of similar properties in the area to see 1. how many are bidding 2. how many properties are selling at X% above their quoted price range 3. how many a NOT selling (getting passed in).

    The Y-man
     
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  6. lettert

    lettert Well-Known Member

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    Thanks Y-man, we've been keeping an eye out on recent sales, which are all over the place. Properties in our area tend to be "unique" ie appealing to a certain type of buyer, eg ours would appeal to someone with large family/in-laws etc. Will definitely start hitting the pavement and attending auctions etc.

    I do also tend to notice that a certain agent/RE has been consistently achieving the highest prices...
     
  7. The Y-man

    The Y-man Moderator Staff Member

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    Makes sense to go with them in that case.

    The Y-man
     
  8. significance

    significance Well-Known Member

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    Not really true. We recently had a bank valuation on our (fully paid off) home in Canberra because we wanted to use its equity as security for purchase of a flat in Townsville, in lieu of providing a deposit. The valuation came in at $720k, though the mortgage we were asking for was only $500k. Incidentally, this was towards the upper end of a valuation from a REA about six months before that (they had verbally said $650-$750k, but their written estimate was only $650-$700k).
     
  9. Scott No Mates

    Scott No Mates Well-Known Member

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    Is that only due to them having the 'best' houses on the market or they are the best at achieving a great price on a piece of .......?

    Street records are only achieved when the property being sold is the best available (there may not have been sales on that street in a long time, so any new sale would be a street record).
     
  10. Scott No Mates

    Scott No Mates Well-Known Member

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    Every valuation has a stated purpose as directed by the client with the guidelines provided by the client. In your case, the client is the bank, the valuation was for mortgage security purposes, it will not necessarily reflect market value. Granted that you had a few appraisals from agents but they were dated and may not have reflected movements in the current market.
     
  11. significance

    significance Well-Known Member

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    Sure, but for mortgage security purposes, it is in the bank’s interests for the valuation to be conservative. In my case, there was no need for it to come in above the $500k loan that it was securing. Yet it came in at the high end of other appraisals.
     
  12. Scott No Mates

    Scott No Mates Well-Known Member

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    I have also seen them come back at contract value which was <50% of market value. :oops:
     
  13. Sackie

    Sackie Well-known cafe bum of the East Premium Member

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    Best way is to just find an agent who believes in your property and price point and will fight to get you as close as possible.

    Don't forget, the agent doesn't work for you or anyone else. Just themselves. So be very careful what you tell your own agent. The more vulnerable or flexible they think you are on price, the more likely they will try for a price prediction later on.

    Having said all that, it's very important you correctly price position your property. If your expectations are too unrealistic, it could see your sales campaign go nowhere.
     
  14. tomlemke

    tomlemke Well-Known Member

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    "I am thinking of selling another property soon, and this one will have to go through agent etc (and probably an auction). How can I tell the agent, "I expect this property is worth at least 1.5m. I am not going to sell for less than 1.5m."? My husband suggests I show him bank valuation (which would be around 1.5m, maybe just under) to drive my point home."

    Lots of alarm bells here, you want the agent to give you a realistic price but your telling him what you want?

    Was the valuation paid by you from an independent valuer or was it organised by you through the bank? I see it happen all the time where owners have organised a valuation from their bank to refinance, they will indicate the figure they want and sometimes the bank comes in close to that.

    Like others have said get 3 opinions on price from 3 different agents, don’t get sucked into going with the agent who tells you the highest price. This is called "buying a listing", they will condition you over the coming months until the property meets the market. Time on the market is the killer, very rarely does something sell for more 100 days down the track.

    There’s a big difference between the price you need and the price something will sell for, if your bottom line is $1.5m, pick a good auction agent in your area and let me him run an auction campaign. If it doesn’t reach the figure your happy with take it off the market and try again in a few years. A good agent will bring you the best price in the market, if your not happy with the price it's up to you to take it or not.
     
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  15. thatbum

    thatbum Well-Known Member

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    Yeah I'm a bit confused about what the issue is exactly.

    You can give instructions to your agent at the end of the day - so why does it matter what the agent thinks its worth?
     
  16. lettert

    lettert Well-Known Member

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    Thanks, this is great advice and we might just do this. We have a figure in mind, if that's not reached we're happy to rent out the property. (and maybe sell down the line when the figure is achievable)
    I guess we're hitting the local auctions soon ;)