The real story: How do you set a property’s price?
From comparable sales to current competition in the marketplace, Sydney real estate agents consider a number of different factors when setting a price guide for a property. Although it’s never a perfect crystal ball – as there are always surprises when it comes to the real estate market, both positive and negative – a price guide set by a knowledgeable agent should give you a good indicator of what you can realistically expect to achieve or pay.
Underquoting is prohibited in NSW
In 2016, underquoting laws were introduced in NSW to prevent real estate agents from understating property prices. The practice of underquoting – to increase buyer interest and activity – too often resulted in interested buyers wasting time and money on inspecting properties, getting reports and attending auctions based on misleading estimates of the selling price.
The reforms state that agents must not give consumers understated or vague property prices (e.g. promoting a property price as “offers above $450,000 when the actual market value is considerably higher). Agents found guilty of underquoting can be fined up to $22,000 and lose their commission and fees from the sale of an underquoted property. This change is good news for buyers, vendors, and the real estate industry, as it removes some of the previous confusion over price.
Recent local sales and current listings
Your real estate agent will look closely at recent sales in your local area for homes that have similar attributes to yours, as well as current properties on the market and their price guides. In a changing market, the more recent these sales are the better, with homes that sold over six months ago often no longer of any relevance.
When researching properties that are currently on the market, agents will look at what price they’re asking, as well as how long the property has been on the market and why it hasn’t sold already if it’s been listed for a while.
Current buyers in the market
Agents also assess the current pool of prospective buyers they are currently working with who are looking for a similar property to yours in the same or a very similar location. Their inside knowledge of what these buyers’ budgets may be, or what offers they have previously made help determine whether they are likely to be willing to pay more or less depending on how your property compares.
This is where a local area real estate specialist really has an advantage. After inspecting hundreds of homes in a particular area, real estate agents develop a sixth sense for assessing a property quickly and accurately, often without the need for additional research. An in-depth understanding of how the market has been moving over recent months, what offers buyers have previously made, and what sales prices have ultimately been achieved all combine to give great confidence in setting a realistic, obtainable price guide.
Want to know more about assessing your property’s market value?
Book a chat with an experienced DiJONES agent today and get the information you need.