WHY DOES EVERY PROPERTY HAVE 5 DIFFERENT PRICES?
???? Have you ever wondered why a home can be appraised for one price, listed at another price, valued by the bank at yet another price and then sold for a completely different figure that leaves everyone scratching their heads? ... Uhmm??
? How can one property have so many different prices and which one is right?
Let’s use an imaginary property to see why.
A TALE OF 5 PRICES: Meet the Smith family. They own a house in the inner suburbs and are keen to move closer to the ocean.
??1. OWNERS' "DREAM" PRICE = ($900,000)
Most owners have a ‘dream price’ which they would love to get when they sell. Then they have a more realistic price ($850,000).However, they also usually have another price called a "this-is-the-lowest-I-will-go" price ($820,000)
These prices are based on their home’s location, age and features, but sometimes prices are also influenced by the owners' emotional connection to the property!
The Smiths have been watching recent sales in their area, which showed a median sale price of $820,000 for four-bedroom houses like theirs in their suburb over the past 12 months.
Mrs Smith thinks their home’s sale price should reflect the median price, but Mr Smith disagrees with his wife because he thinks the new pool they installed last year should add at least another $40,000. They disagree and feel a bit confused so they do what a lot of people do and get the bank in to do a valuation.
??2. BANK'S PRICE = ($770,000)
When you first get a mortgage, your lender will value the property. This gives the lender confidence your home offers ample security against the amount you want to borrow.
A bank valuation is generally more conservative than market value so it's no surprise the Smiths are extremely disappointed with the figure given to them by their bank!
Next, they call in a real estate agent to get another opinion.
??3. REAL ESTATE AGENT'S PRICE = ($830,000-$870,000)
An agent will typically inspect the home and research comparable sales in the area before producing a sale appraisal price. The Smiths’ agent conducts his inspection and, based on current strong demand for four-bedroom homes in the area, estimates it will sell for $830,000 to $870,000.
??4. LOCAL COUNCIL'S PRICE = ($700,000)
Meanwhile the Smith's local council Rates Notice arrives in the mail.
Every year when a property owner gets their rates bill they will see on the Notice a Capital Improved Value (CIV), site value, net annual value (NAV) and/or gross rental value (GRV).These figures are calculated using various methods including comparable sales data and the bi-annual figures from the State Valuer-General’s offices.
Councils, the Water Corp and fire authorities, use these figures to work out how much homeowners owe them for using their infrastructure and services.
According to the Smiths’ Rates Notice, their property has a CIV value of $700,000!!
??5. ACTUAL SALE PRICE = after 3 weeks on the market: ($875,000??????)
Fortunately, the Smith's had a great agent who achieved a great price because he had a structured plan, worked hard and attracted multiple offers on the property.
?MORAL OF THE STORY?
The TRUE VALUE of any home is the price which the buyer is prepared to pay on the day and which the owner is willing to accept!
? "HOW DO I GET MORE?" I hear you ask
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The BEST WAY TO GET TOP DOLLAR is by having an agent who does 3 things:
If you have a GREAT AGENT they will make sure you get TOP DOLLAR and not just leave it to chance!
?? So, ask yourself the fundamentals:
?Does your agent have a structured selling process that makes it "easy" for buyers to make offers? Can they show you this process?
?Is your agent good at creating competition amongst buyers to get them to pay their maximum? Can they prove how they have done this in recent sales?
?Does your agent "work hard" to get you TOP DOLLAR?
?Do they answer and return ALL buyer calls & emails promptly?
?Do they open the home at every possible opportunity or just once a week?
? Do they write up and present every offer to you thereby giving YOU the control and opportunity to counter-offer?
?Do they give you weekly feedback ON HOW THE SALE IS GOING so you're fully in the loop?
? Do they invite neighbours to home opens in case they have friends or family looking to buy in the area?
? Or do they just promise to do all the above and don't actually do it? Or, worse, get their "assistant" or their "team" to do the above and pawn it off on a less experienced, less qualified or less confident person to handle YOUR MOST VALUABLE ASSET?
There are hundreds of "little" things that set a GREAT AGENT apart from the rest.
GREAT AGENTS ARE NOT THOSE WHO SELL 100 PROPERTIES A YEAR AT THE FIRST HOME OPEN!
??GREAT AGENTS ARE THE ONES WHO TAKE TIME TO SQUEEZE ALL THE JUICE OUT OF THE LEMON ON EVERY SALE NO MATTER WHAT BECAUSE IT'S YOUR MOST VALUABLE ASSET!"??
CALL ME TODAY TO DISCUSS MAXIMISING YOUR PRICE!
?? 0450 408 651
Selling and not sure where to start?
Send me your questions and I’ll respond directly within 24 hrs.?It's a COMPLIMENTARY service to help you MAXIMISE YOUR PRICE.
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