Comparables & The Value of an Honest Agent
Roaming Magazine – July Edition
Confusion understandably arises when sellers are faced with sharply contrasting listing prices from prospective agents. Often it seems one will passionately proclaim they can get the highest price, while one provides seemingly dry data to quantify the value of your home. Who do you choose? Is one less determined than the other? Does one not see the value in your home that you see?
This is a scenario when logic should outweigh emotion. An agent may give you the number you want to hear to secure your business, but this does not provide a vendor with what they need, being the reality of the current market and an honest appraisal.
During these conversations you may hear the word “comparables” and wonder, what are they? Agents have access to several databases with records of millions of home sales across the country. This gives agents real sales data of homes like yours in your area, providing a “comparable” on which to price your home. That said, no agent or database can predict the exact value of your property. Only the buyers in the market can do that.
So is a conservative agent underselling your home? The simple answer is no. A good agent will always provide you with the current market value of your home based on recorded data, then aim to attract buyers with an emotional response to your property. This, in turn, increases the odds that competition amongst buyers will drive the price upward.
To equalise the process of pricing a home, Fair Trading NSW upholds underquoting laws pertaining to the sale of residential properties. The practice of underquoting causes active buyers to waste time and money at inspections and auctions because of misleading estimates of the selling price. Agents charged with underquoting face a potentially hefty fine and the loss of their commission.
On the flip side, overpricing a property is equally misguided. The reality is consumers rarely purchase anything that is overpriced. Today’s buyers are savvy and aware of the market trends in their chosen area. Having a home on the market for too long causes suspicion in an active market and the likelihood of offers reduces when buyers are offside.
So have a forthright conversation with your agent. Ask for a comparables report if you do not receive one, choose an agent offering expert advice, and build rapport with your chosen agent that sustains you through honest conversations during the sales process.
