let’s take note
of what a real estate salesperson does for his, or
her, commission and you can ask yourself if you can’t
do the same.
your property has not yet been advertised
for sale, often, the first thing a real estate salesperson
will do for you is give you a free appraisal. In fact
many will give you a free appraisal even if your property
is not yet on the market. They happily do this knowing
that a certain percentage of people asking for a free
appraisal are at least considering selling and if
they are satisfied with the salesperson’s estimate,
there is a reasonable chance that he, or she will
be given the property to sell. It is quite common
for vendors to ask several real estate people to give
a free estimate of a property’s value and then
entrust the sale to the person who puts the highest
estimated value on it.
myself normally wouldn’t feel comfortable
asking an agency to provide a free appraisal if I
had no intention of employing them, because I would
consider this to be taking advantage of them. But
on the other hand, I wouldn’t feel uncomfortable
if I told the salesman that I was going to have a
go at selling the property myself and wanted to get
an independent estimation of its value. I would tell
him that if he gave me a sensible appraisal and I
wasn’t successful in selling it myself, I would
seriously consider calling on his service.
days, when a real estate salesperson does
an appraisal, he or she is required by law to give
you a ‘comparative market analysis’. This
is known as a CMA. A CMA is a list of prices and other
important information about similar properties sold
in the same area as the one being appraised.
appraisal can only be a rough estimate, because
it is impossible to know exactly how much the house
will fetch before it is sold. No two houses are exactly
the same. As you can imagine, even two houses or apartments
built next door to each other in the same year and
having exactly the same design and floor space on
the same size section can vary in value according
to how they have been maintained and presented. Even
when one has just been sold, there is no guarantee
that the price it sold for was its true value. Some
properties sell below their potential and some sell
for more than they are worth. So the best that anyone
can do is make an educated guess.
Rateable Valuation, which appears on your
rates notices, is another rough (very rough) indication
of the value of your property, but these don’t
take into account the improvements to the grounds
that may have been made; such as gardens or fences.
Neither do they include the chattels, such as white
ware, carpets, curtains, drapes and light fittings.
The valuations may not also reflect any unreported
extensions to rooms or other interior alterations
that have been made. So it is not unusual for properties
to sell for ten or fifteen percent above Government
Other important considerations that government valuations
may not reflect are street appeal, condition of fences,
views, access; that is, whether it is a flat or steep
section or has a lot of steps, and exposure to sunshine
and light. Lack of sunshine and dampness can have
a very negative effect on value.
New Zealand, one way to get a CMA, if you
don’t want an appraisal from a real estate salesman,
is through the government agency, ‘Quotable
Value New Zealand Ltd’. For about 39 dollars
(it keeps going up) they will provide you with a detailed
list of up to ten properties similar to yours that
sold in your area over the previous months. The list
will give you the addresses of each of the properties,
the dates they were built, their government valuations
prior to the sale, their floor areas, the sizes of
the sections they are built on, the materials they
were constructed of and the price they sold for.
The information they give you will also provide you
with those same details about your own property together
with an estimated guess at the price range within
which it could be expected to sell for. These prices
don’t truly reflect the value of the chattels
that are likely to have been sold with the properties,
which may be worth an additional few thousand dollars.
If you have a computer, Quotable Value New Zealand
Ltd will provide you with these details over the Internet.
Their web site address is www.qv.co.nz
valuations can be vary useful as concrete
evidence against counter attempts by buyers to try
to force down the price you are asking by trying to
make comparisons with property sales they claim to
be familiar with while assuming that you aren’t.
way to help you assess the value of your property
is to go to the Internet and look at the real estate
web sites (particularly ‘TradeMe.co.nz’
Estate.co.nz" in New Zealand) to see what
other people are asking for similar type properties
in your area. Most of the listings will provide the
addresses of the properties, so if seeing the photos
on the Internet isn’t sufficient for you, you
can drive round and look at the places from the outside.
Naturally, the prices that people ask for their houses
does not mean that those will be the final selling
prices, but they can help you estimate how much you
could expect to get for yours.