How do you know what your home’s really worth?
Unlike the crockery and cushions that fuel your decorating habit, property doesn’t come with a precise pricetag. Cue the market appraisal, a complimentary service that sees a property inspected and valued in line with current trends. “It’s based upon recent sales, seller and buyer feedback, and research into market activity,” explains Michelle Delaney, CEO of Better Homes and Gardens Real Estate in Australia. Here, we break down the appraisal process – and why you should book an appointment stat.
What does a market appraisal involve?
A licensed local real estate agent will drop into your place for a 15-minute inspection. Then, drawing on their knowledge of the market and area, they’ll give you an up-to-date price guide for your home.
How is the figure estimated?
Multiple factors come into play to value a property: the home’s size, features and condition; its location; the sold price of similar properties in the neighbourhood; and trends in the overall market. “Real estate is driven by supply and demand – if there’s an oversupply of properties and smaller demand from purchasers then the prices may soften, and visa versa,” explains Delaney. A professional appraiser will also look to the future – perhaps a new apartment block is in the works nearby, or maybe a revision to school zones is on the cards. Each of these factors will impact your property’s value.
When should you get your home appraised?
A market appraisal is essential if you’re considering selling in the long or short term. But even if you’re not going anywhere, it’s worth booking one in every few years – stats show the market can shift up to 20 per cent in a single year, and your home’s changing value will affect your home loan equity, insurance policies and asset value.
Should you seek out multiple opinions?
Short answer, yes. The market appraisal is complimentary and obligation-free, so you have nothing to lose. The tricky part comes if the appraised values vary widely. Be wary: a high estimate may mean the agent is over-quoting to get your business; a low estimate could point to an agent seeking out a fast sale. To cover all bases, do your homework and compare each estimation to recent sold prices in your area. And if all else fails, go with your gut; a secondary benefit of the market appraisal is that it provides an opportunity to meet with different real estate agents and assess who you’d trust to work with going forward.
Are there any downsides?
Not specifically – knowledge is power. But remember that appraisals aren’t legally binding and should be used as a guide only. A property valuation, on the other hand, is carried out by an independent valuer who’ll provide you with a comprehensive written report (though it comes at a cost).
Is there anything you can do to increase the value of your home pre-appraisal?
Kitchens and bathrooms sell houses, so if time and budget permits, a cosmetic revamp or larger-scale renovation will boost your home’s estimated value. Curb appeal is also extremely important (judgements will be made before your appraiser even reaches the front door), so tidy up the front yard, give the facade a fresh paint job, and replace your front door and letterbox if necessary. Of course, a market appraisal is more about the bigger picture than the finer details, but these updates will nevertheless set the tone for success.
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