Market Appraisal/Opinion
A Market Appraisal or a Market Opinion should be a document provided by a Real Estate Agent or Sales Representative to an owner of a property or business that suggests a price that the property or business could sell for in the current market. I stress the word “should” as I often speak with people who have had a Real Estate person out to their home who have not provided them with a written appraisal.
In WA, all Real Estate Agents and Sales Representatives are governed by the “Real Estate and Business Agents Act 1978” & the “Real Estate and Business Agents and Code of Conduct 2016”.
Part 6/26 of the Code of Conduct specifically refers to:
“Duties regarding opinion of market price” and I quote;
“If an agent or sale representative gives a person an opinion as to the current market price of real estate of a business, the agent or sales representative must not act as an agent or sales representative for the person unless the agent or sales representative gives the person the following in writing –
(a) a statement of the opinion;
(b) the reasons on which the opinion is based;
(c) if available, information regarding the sale of similar real estate or businesses, supporting the opinion.”
So other than the legal requirements that an agent should provide you with the appraisal or opinion in writing, there are some more practical reasons, such as, how is the person to know how the agent or sales representative came to their price? Are they just guessing? How does your property compare to others in the area? If these questions aren’t answered by the agent or sales rep in the written Market Appraisal then I would be very hesitant to go any further with that person.
After all, if you go to market with most likely your biggest asset, the first thing a prospective buyer is going to do is their due diligence. So why would you as an owner not do the same thing? If an agent comes to your property and doesn’t provide you with a written Market Appraisal/Opinion, what else aren’t they going to do? What else don’t they know?