Understanding property appraisals
A property appraisal is an informal estimate of what your home may be worth, often provided as a free service by real estate agents. It’s an educated opinion based on several factors that influence value, such as:
- Recent sales of comparable properties in your area
- Current market sentiment
- The agent’s insight into features of your home that will generate buyer interest and competition
- Any negative features that could limit interest or affect the price buyers are willing to pay
It’s important to note that a property appraisal is not the same as a property valuation. We’ll explain the differences further down the page.
Do you need a property appraisal?
You should strongly consider a property appraisal if you’re thinking about selling, refinancing, or simply want to understand where your property sits in the current market. At the end of the day, a property appraisal report provides a clear picture of your home’s value and helps guide your next steps.
The key benefits of a property appraisal
An appraisal comes with a number of benefits, including:
- Understanding your property’s value in the current market
- Gaining insights into recent sales in your area
- Identifying strengths and weaknesses that may affect a sale
- Receiving expert advice on how to boost your property’s value
- Knowing whether it’s the right time to sell
- Tapping into the local knowledge and expertise of an LJ Hooker agent
These benefits make a property appraisal a worthwhile step for any homeowner considering their next move.
Why consider multiple appraisals?
It’s worthwhile to request appraisals from several agents before deciding who to sell your property with. At the same time, doing your own research helps you understand the rationale behind each agent’s pricing strategy and gives you the confidence to agree or disagree with their recommendations. By comparing multiple appraisals alongside your own findings, you’ll be able to gain a clearer picture of your property’s position in the market.
Understanding how to measure your property’s value by inspecting competitive properties
As part of your own research, it’s useful to compare your home against similar properties. Attend inspections for homes currently on the market, however remember, asking prices don’t always reflect true market value. The most reliable benchmark comes from properties that have sold within the past six months.
When comparing, consider homes that are most similar to yours. For example, look at properties that are a similar land size or apartments that have comparable floor space, the same amount of accommodation and bedrooms on offer, the style of the home and whether it is renovated or dated, the condition of the property and importantly its location, particularly proximity to amenities and lifestyle attractions such as parks and beaches.
Consider features your property may or may not have. For example views of the city, water or parkland, a swimming pool, secure level garden, garaging, level lift access if you live in an apartment complex, luxury inclusions or special eco features such as solar panels and rain water tanks. On the downside, being on a busy road or having no outlook in an area where many homes enjoy views may affect your sale price and this should be taken into consideration when determining how much the property is worth.
Once again, your agent will always be your best source of knowledge in this space. They can highlight which features of your home are likely to attract the most interest and provide data-backed insights to help you make an informed assessment of your property’s worth.
How to research the market
There are many ways to find out what your property may be worth as well as the impact of what current market conditions may have on your sale.
- Check the times and dates of local open homes and up-coming auctions and attend as many as you can. The interest in these will help you understand the market conditions and help you gauge your home against the rest of the market.
- Check in with your real estate agent or an agent who is particularly active in your area. They should be able to provide you with an abundance of free property sales information from a number of reliable sources.
- Australian Property Monitors and RP Data are online providers of property data and information, who are highly reputable and for a small fee will supply you with the same reports agents and banks use to assess property values. Reports worth purchasing are postcode data, street history, auction results and market trends to name just a few. But ask your agent first as they may well be able to provide these reports for you for free.
- The weekend paper’s property lift out is another valuable source of up to date market information as well as recent sale information and auction results.
- Websites like www.domain.com.au, www.realestate.com.au and agent sites like www.ljhooker.com.au are another good place to find out what is for sale in your neighbourhood. These sites also provide commentary and articles relating to current market conditions.
What is the difference between a property valuation and a property appraisal?
A property valuation is usually performed by a Certified Practicing Valuer for an agreed fee. They are not real estate agents or associated with any real estate agency. A valuer will inspect the property, carry out research and analysis into the local market and provide a detailed report regarding issues affecting the current market value of the property.
A property valuation service is commonly required by a bank or financial institution prior to approving a home loan. It is also used by buyers and sellers wanting an independent opinion prior to pre purchase or pre sale, family or partnership settlement, capital gains tax and in some instances building insurance.
What is a seller’s market and how can it affect your price?
A seller’s market reflects the return of consumer confidence and a strong economy. This situation occurs when buyer demand outweighs housing supply and greater competition will inevitably drive property prices up.
With the likelihood of competitive bidding, a seller’s market will see increased auction success. However, you need to take into consideration that the real estate market is very segmented, properties at the lower end generally always attract strong buyer interest, while properties at the high end may struggle for attention.
What impact does a buyer’s market have on the sale price?
This is a common real estate term referred to when market conditions favour buyers. In a buyer’s market there are typically a large number of properties for sale and fewer buyers. This may come about because of rising interest rates and a slowing economy.
In a buyer’s market, sellers will generally need to be competitive with pricing in order to achieve a sale. Great results are still obtainable and your real estate agent should be able to offer the right advice and best approach.
Book a property appraisal with LJ Hooker today
A property appraisal with LJ Hooker is a great way to find out what the market is doing and making a decision to sell or stay based on current property prices is always a smart move. Speak to an expert agent in your area about organising an appraisal for your property, or click the link below now.
DISCLAIMER - The information provided is for guidance and informational purposes only and does not replace independent business, legal and financial advice which we strongly recommend. Whilst the information is considered true and correct at the date of publication, changes in circumstances after the time of publication may impact the accuracy of the information provided. LJ Hooker will not accept responsibility or liability for any reliance on the blog information, including but not limited to, the accuracy, currency or completeness of any information or links.
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