Most real estate agents will offer a free property appraisal to property owners and potential clients. It may be a surprise to some that these appraisals take a lot of time to prepare. So, what’s involved and why do we offer them at no cost?
Agents take the time to prepare appraisals to that they can create meaningful relationships with potential sellers in their area. The vendor may not be ready to sell their property at that time but when they are ready, they will be armed with all the information they need and will hopefully contact the agent that has already spent the time preparing the appraisal. Preparing a proper appraisal is not as easy as clicking a button and seeing what has sold in the area. There are guidelines to follow.
The requirements when preparing appraisals are set out in the Real Estate Agents Act (Professional Conduct and Client Care ) Rules 2012 and are as below:
- Appraisal requirements:
- Must be provided in writing before an Agency Agreement is signed;
- Must realistically reflect current market condition;
- Be supported with comparable information on sales of similar land in similar locations.
- An agent needs to view the whole property to provide an appraisal. They cannot just look through windows and make assumptions on the condition of the property and then provide an appraisal.
- The appraisal needs to be accompanied by proper analysis of the current markets. A list of properties that have recently sold in the area doesn’t cut it. The agent needs to explain why comparable properties have been included or excluded.
- Appraisals need to be fully explained to the vendor.
When listing your property, one of the biggest mistakes to be made is marketing your property based on a poorly prepared appraisal. An appraisal that has been prepared with an accurate price is key, because if the property’s value is oversold in the appraisal (with no proper evidence to back it up) it’s going to be much harder to meet vendor’s expectations if and when offers are made.
When choosing an agent to sell your property, make sure that they provide an in-depth appraisal and that they also have the knowledge to answer any questions you may have.