header search

Sidenav Overview

Back to https://hs-uat.ljhooker.com.au

Sidenav Overview

WTP_3757_Article

Understanding Property Appraisals: A Home Owner's Guide

Phase 1 Sell
Phase 2 Sell
Phase 3
Phase 4 Sell

01.

What is a property appraisal?

 

A property appraisal is an estimate of the price of your property if it was to hit the market at the current time. Real estate agents specialise in answering the ‘how much is my home worth’ question, and they do it by running a comparative market analysis which involves finding similar properties that sold usually within the last 90 days.

If you live in a very tightly held area where there have been few sales it can be trickier to work out the value using this method. Agents may expand the comparison search period depending on the level of activity in your suburb as well as market conditions. In a very hot market, house prices can change rapidly. In more stable conditions, it is not unreasonable to include sales results achieved up to 6-12 months ago.

The closer agents are able to match your property to others sold in the area, the more accurate the appraisal will be.  The term ‘comparable sales’ is often used and this means looking at the results of properties in your suburb of a similar size with similar features. There is no point analysing what another home fetched if it is fully renovated or sitting on land twice the size of your own.

When a real estate agent conducts a property appraisal there are several things they consider:
- Property size
- Fixtures and fittings
- The rooms in the property
- Current competition
- Wider market trends
- Property structure and condition

It’s always advised that you contact a real estate agent from your local area to conduct an appraisal. They live and breathe property in your neighbourhood and have an intimate knowledge of the suburb. This ensures they can give you a more accurate appraisal.

So, let’s look in detail at how the actual value is determined.

What's involved in a property appraisal?

Valuations vs. Appraisals

Understanding the value of your property is crucial, but it is equally vital to knowing the distinction between a valuation and an appraisal. This knowledge is essential as it significantly impacts decision-making regarding property transactions, investments, and understanding your true financial position in the real estate market.

02.

The property appraisal process

 

It is a simple process to get a property appraisal.

 

Step 1

Book your property appraisal

Property appraisals are nearly always free.  Your local real estate agent is the best person to invite as they will be able to give you a good understanding of your property’s worth.

Step 2

Relax about the state of your home

You don’t need to worry about styling your home for a property appraisal.  Real estate agents are experts at seeing through the general household clutter. They are more interested in looking at the size of the property, the number of bedrooms, the number and quality of bathrooms, the kitchen, the overall building structure and its condition.

So don’t stress about the pile of kids' toys on the floor, or the basket of washing that hasn't been put away…relax, have a cup of tea and simply show the agent through your home – warts and all.

Step 3

The real estate agent home visit

Once the real estate agent is at your property, they’ll likely have a good look around and ask you a few questions. Always be honest, especially about any renovations or upkeep you’ve done over the years. There will also be a chance for you to ask the agent any questions you may have. Some questions you may ask include:

  • What kind of experience do they have?
  • What is their knowledge of the local market?
  • How do they plan on marketing your property?
  • What recent results have they had?
  • What’s their commission?
  • Can they provide references?

Of course, there are many more questions you can ask. Don’t be afraid to say what’s on your mind. Remember, you need to be comfortable with the agent. They are, after all, selling your most important asset.

Step 4

Property appraisal figure and supporting documentation

The real estate agent will come back to you with the figure they believe is accurate for the market, area, and property. This will include supporting documentation such as local sales of comparable properties within the last 90 days and a summary of wider market trends.

03.

Should you get a property appraisal?

 Understanding the value of your property is a wise financial decision

 

Getting an appraisal isn’t always necessarily about selling. It can also be simply about understanding what your property is worth in the current market. If you’ve recently renovated you may want to know how much value it has added to your property. Perhaps you’re looking to buy an investment property, considering upsizing as the family has grown, or downsizing as the family has moved out. You may just simply be keen to find out if the value of your property has changed.  Your home is undoubtedly one of your most valuable assets (if not the most) so knowing its worth is a wise financial decision.

04.

Taking the next step

 

The good news is organising an appraisal is not a difficult task. And while you may feel the pressure to madly run around tidying to ensure it is at its best presentation, you can relax knowing this isn’t necessary to find out the value of your home. Agents will be more focused on other things than if your laundry basket is overflowing or the dishwasher hasn’t been emptied.

yellow-icon1
Finding an agent you can trust

If you decide to sell, there are several steps to take. First and foremost, you need to choose an agent. When deciding on a real estate agent, you need to find one you’re comfortable with and one who you trust.

Selling Checklist
yellow-icon2
Choose the right ‘value- add’ home improvements

Another thing you’ll need to do, once you’ve decided to sell, is to walk through your property with fresh eyes – as if you were a potential buyer. This will hopefully give you a good idea of what the buyer’s first impression will be and will indicate the ‘problem’ spots that need attention.

Styling to Sell eBook
yellow-icon1
Tackle the Important Questions

When talking to the real estate agent, it’s also important to discuss the best way to sell your property; via auction, private treaty, tender or expression of interest. Your real estate agent will be the best person to guide you on this.

Selling Real Estate FAQs
yellow-icon2
Marketing Your Property to Sell

Effectively marketing your property is a critical part of achieving a successful sale. A well-rounded marketing plan with a mix of different advertising channels such as the internet, social media, signboards, local marketing and newspaper advertising all play an important role in spreading the word about your property and creating healthy competition among buyers.

Access our guide

Once you’ve decided what needs work and what doesn’t, it’s time to spring into action. Everything will need to be completed before professional photos are done. You’ll also need to declutter where possible, and you may even need to rearrange some furniture. At this stage, it’s a good idea to listen to the experts as they often know what potential buyers want to see when they walk through your door for a house inspection.

Selling your property

 

If you have been pondering just what your property may be worth, whether you are ready to sell now or perhaps in the future, then it is time for an appraisal.

Being educated and informed allows you to make smarter decisions that more positively affect your current and future financial well-being.

It is an easy, informal and essential process that is simple to organise. Who knows, the appraisal results may even surprise you and unlock even brighter years ahead.

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.