Buyers Agent get asked all the time when we’re doing appraisals, “what will my property sell for?”
The reality is, there is no agent on the planet that can give an exact price of what the property will sell for. Certainly, we can give them recent indicative sales and give our opinion on more or less what the property will sell for by way of those indicatives, but none of us can determine how popular that property is going to be, how much competitive environment will be created, and what the end result will be.
Even if the agent could give an exact price on the property, we all know that sellers want more for their properties than what they are worth. This is a fact that we all need to come to grips with and understand. Even if you did tell the sellers what exactly the property would sell for, they would judge you on it and would want to list with another agent who would tell them it’s worth more. The reality is, property usually sells for less than what the sellers are expecting.
Most sellers won’t understand that valuing a property is not the job of the real estate agent. This is why it’s important that we, as an industry, educate sellers on exactly what our role is.
What do Valuers do:
The Australian Property Institute defines a valuation as “an established, ethical, and evidence-based process for assessing the monetary value of an asset at a specified date, that is legally defensible and undertaken by a qualified, professional Valuer.”
Valuers go to university for three years where they learn how to value a property through quantity surveying and other methods. They will give the owners a valuation report that provides an assessment or opinion of the value of an asset.
Put simply, valuing properties is not a job a real estate agent is qualified to do.
What do Real Estate Agents do?
What is our job if we’re not valuers or qualified to give a price? The real estate agents’ job is to market the property, build relationships with buyers, get as many buyers to the property as possible, and to create a competitive environment where the buyers compete with one another and you negotiate from that pool of buyers the highest the market is prepared to pay.
Real estate agents should not be entertaining or going down the road with sellers at all about what their property is priced at or what they will receive. This is a sure-fire way of landing yourself in big trouble and going down a path that you really don’t want to. All you can do is get the indicatives of the probable selling price and give the sellers a bit of a range on where their property will be.
When you’re asked the inevitable question, “how much is my property worth?”, you need to educate the sellers on methods of sale and marketing strategies because that’s what you are qualified to do. If you start giving prices, you’re only going to be shooting yourself in both feet.
The truth is, the top 1% of real estate agents never focus on the price at a presentation. What they do focus on is the methods of sale available to the seller in order to create a competitive environment which will result in getting the highest the market is prepared to pay.
Some of these methods of sale involve the Priced Strategy, Non-Priced Strategy, Tender Processes, and of course the Auction Strategy. The top 1% of real estate agents are extremely educated in all the different methods of sale and are able to show the seller the best method to suit their needs, timeframes, and outcomes.
Come along to my upcoming FREE half-day Real Estate Brilliance webinar where I will explain how to handle the price questions and how to educate sellers on the methods of sale strategies.
