What is the market value of a property?
It was chance, not aspiration, that saw me major in Valuation and Property Management at University. Faced with the prospect of picking a specialty, a group of friends and I decided that following in the path of ‘Greg’s dad’ the valuer, seemed like a reasonable option. Given the old adage of strength in numbers we enrolled as a collective. Decision made!
Now, Greg’s Dad was a man of few words, but when he did talk, he was worth listening to. Looking to him for tutelage on market value he gave us one piece of advice;
“the only true market value is the one that comes on a cheque”
If you’ve sold a house recently, you’re likely to have interviewed a few agents before deciding on the best one to use for your sale. As an agent operating under the REAA we are required to conduct a market appraisal. A good real estate agent will then provide a report which is likely to include;
- The potential sales range for your property based on recent comparable sales
- A detailed market plan including the best method of sale and time frame
- An advertising package tailored to the target market of your property
- A breakdown of the costs to sell a house
Why a price opinion shouldn’t be your driver
Appraising a house is not a science. It’s more an educated guess based on recent sales of similar properties in the area. Depending on the skill level and experience of the agent, the quality and relevance of those sales will have an impact on the expected range. That may mean the variance between ranges is significant.
So, how do you know which real estate agent is right? The answer is simple. None of them.
They are not the buyer and will not be offering on your house.
What is the real estate market?
At any one time the real estate market is happening around you. If you decide to sell, you’re entering a market place that’s already active. Within that active market you have buyers looking at different properties with the intent of purchasing. The pool of buyers is made up of:
- Buyers that have just started looking
- Buyers with a few months experience
- Buyers who are ready to purchase – these buyers will have built a good market knowledge and are likely to have already offered on property. This process educates buyers on the process and what they need to do to put forward a competitive offer
The buyer for your property is likely to have viewed recent sales in your area and may even have offered on them. The amount a buyer offers will be based on their time and experience in the market, their emotional attachment to your property, motivating factors such as the birth of a child or school zoning, and spending restrictions.
Restricted spending – bank or self-imposed positions
Most buyers will need to take a bank loan which will form part of the offered price. The amount of finance available will restrict what a buyer can offer for a property. This is a bank-imposed position. As you move up the value scale, it is often a self-imposed position, or choice, which will see buyers cap their offer at a certain level.
Understanding a buyers’ back story will give leverage during any negotiations. Ensuring you pick an agent with a good understanding of the market, buyer behavior and strong negotiation skills will ensure you get the very best sale price for your home.
Why didn’t my property sell?
When a property doesn’t sell, people often look for a place to lay the blame. Good candidates are the agent or the marketing. What may in fact be the issue is that there is not an active market for the style of property at that time. Properties with a walk up, little winter sun, plaster clad homes or investment properties are all saleable, but the timing of the sale is paramount.
External factors which could affect the success of your sale include;
- The state of the real estate market
- Recent local body and government policy
- Availability of finance
- Seasonal fluctuations – the best time to show your particular property
Take your time to seek the best possible real estate advice upfront. Being well informed will protect you during the sales process.
The Wellington Market
It’s been a roller-coaster ride in the capital over the last few months. The year took off with a hiss and a roar with some great results chalked up. March saw a slowing in sales with properties taking a bit longer to transact but getting there eventually. A large chunk of the April market was taken out by Easter and ANZAC day which created a ten-day holiday for three days. Traditionally May signals the start of the winter market with prices stabilising as volumes drop away, although with our own stock levels on the increase, it will be an interesting one to watch.
WELLINGTON MARKET QUICK FACTS
Average sale price by Ward:
What’s on this May in Wellington:
The Opera House, 111 – 113 Manners Street, Wellington
The West End’s legendary murder mystery drama The Mousetrap is the longest-running show, of any kind, in the world. Written by the best-selling novelist of all time (Death on the Nile, Miss Marple, Poirot) and the ‘Queen of Crime’, Dame Agatha Christie, The Mousetrap has kept audiences guessing for six decades.
In her own inimitable style, Dame Agatha Christie has created an atmosphere of shuddering suspense and a brilliantly intricate plot where murder lurks around every corner.
Joy Is Autumn, Capital E, 4 Queens Wharf, Wellington
Come into the warmth and play in the cold! We’re bringing Autumn inside with Fall crafts and other seasonal activities. You can design a scarf, go hunting for eggs or jump in a pile of leaves!
Glow in the dark titiwai tours – New Zealand glow worms, Botanic Garden, 101 Glenmore St, Wellington
A fascinating tour into the world of titiwai, New Zealand’s glow worm. This outdoor night-time tour takes about one hour and is designed for children 7 years and older. Parents, please use your discretion.
Meet at the Founders’ entrance to #WellingtonBotanicGarden on Glenmore Street. Please bring your printed ticket and a torch. We’ll see you there!
If you, or anyone you know, could benefit from a considered market assessment by Wellington’s only licensed agent and registered property valuer, please do not hesitate to call. We are always very happy to help.