How accurate are agent estimates?
Agents are taking an educated guess at what your home will sell for. You will often see them using a $40k – $100k range in their pricing estimates. Any agent who tells you that they can value property to within $5 – 10k of it’s selling price is to be avoided in my opinion. These agents are either know-it-all types or they simply aren’t testing the market sufficiently with a proven competitive process when they sell property (think deadline, Tender).
Agents that put every property on the market with a price can usually be more accurate with their appraisals but you’ll never know if they are really getting you the best possible result when it comes time to sell.
It’s time for a bit of a shakeup. In this day and age, you should be able to get an estimate of the value of your home without having a face to face meeting with a real estate agent.
This would help you avoid the key problem with free appraisals from real estate salespeople:
Agents could be incentivized to give you an inflated estimate.
Many salespeople are not that good at explaining their key points of difference over their competitors. So, the home owner often picks the agent who quotes them the highest appraisal price, because they have no other basis on which to make their decision.
Once a salesperson gets the exclusive listing you are locked in with them so if the ‘market price’ turns out to be a bit lower than their appraisal you are likely to go with it anyway because you are well through the process by the time it comes to reviewing any offers and changing agents at that point isn’t that easy (you are usually tied in for 90 days with one company).
Salespeople can end up in bidding wars against each other trying to ‘win the listing’. On top of this, the honest, reputable agents who are likely giving you the most accurate estimate of value don’t even get a look in because you are attracted to the higher prices quoted by everyone else.
What’s the answer?
Remove the pricing estimate as a factor in your decision when choosing an agent. It doesn’t matter what they say it’s going to sell for, the market will determine how much your property will sell for. What does matter is:
- How are they going to attract as many qualified buyers as possible to your property?
- What are the most efficient and cost-effective marketing channels available?
- How are they going to help those buyers create an emotional connection to your home, while they are there and after they have gone?
- What process are they going to use to give them 1, and only 1 opportunity to buy it? Preferably in competition.
Most of these questions can be answered well before they visit your home.
What’s going to happen to all those ‘free appraisal’ agents then?
Pricemyhouseforfree Area Experts offer other services of value to home owners. They will produce marketing material that helps you answer questions other than… ‘What is my house worth?’
- How to create competition amongst buyers for your home
- How to present your home to obtain maximum possible interest
- When is the best time to sell?
- What renovations add the most value prior to selling?
- What method of sale (Auction, Tender, deadline or Asking Price) will secure the best possible price in a reasonable amount of time?
- Where should you buy an investment property? What kind of property should you look for?
Pricemyhouseforfree Area Experts answer these questions and provide this information to their clients and their communities (without asking for anything in return) as the local experts.
Pricemyhouseforfree Area Experts position themselves as ‘competition creators’ rather than ‘property valuers’. You will see them as marketing experts / negotiators-for-hire who you will employ to maximise your net worth when it comes time to sell your home.