It would come as no surprise to burningpants readers to hear that not all real estate agents are entirely truthful in their valuations when competing for your house to add to their sales stocks!
Do some really think that we sellers are just a tad dimwitted and easily taken by the sales chatter that is so clearly just that. Sales chatter.
One particular burningpants scribe recently sold a terrace in the leafy eastern suburb of Paddington, Sydney. A big decision, the aforementioned contributor (let’s be honest, it’s “me”) decided to hawk my pad to three local real estate agents, all specialists in what is a pretty small area.
I decided to appoint the agent I would most rather be selling through, rather than buying from. Sounds simple – sort of. In my humble opinion, valuing a 2 bed, 2 bath pad should’ve been one of the easiest propositions in Sydney. There are only a few variations that need to be considered as they are, after all, row upon row of attached Victorian terraces. What size? Is it renovated and to what standard? How many bedrooms? Bathrooms? Parking?
As such, you would think that the three agents would be pretty consistent in their evaluation of my renovated 120-metre square pad, without parking. Well, you’d be wrong!
The first valuation came in at “anything to $1.25M”. The next $900,000 and the third (the firm I went with),” let’s hope for $1M to $1.1M”. So, a range of $350,000 for the one property, or in other words about 30% of the average valuation.
So, why the variation? Did the first agent think I was a sucker (a bit like a moth to a bright light) and was the second looking to undersell me for the benefit of their investor base (it is Paddington after all)? I suppose I will never know!
But, I do know how I went and how the market changed in April, May, and June. In short, the market fell like a stone, and it continues to fall like a stone. Unfortunately, I watched it first-hand.
People ask me if I am happy with the price I got. In short, the answer is “eeer ……. sort of …. Yes, I suppose.”
It may not have hit the target of $1M, or the phantasmagorical $1.25M, but it went for what the market was prepared to pay for it, and I am about the only sale I am aware of in Paddington that sold a 2006/2007 purchase for more than I bought it.
It’s looking to me like there is about to be a swathe of people going to get caught. For those Aussie families that are heavily geared and fall prey to the social ill of unemployment, we might start to see some real rises in mortgage sales, negative equity and all sorts of horrible words we haven’t seen as relatively commonplace since the early 1990s.
I really don’t think that my little pad will reach this 2012 sales price for quite a few years from now, though. 2015? 2020? Who knows? One thing is for sure, real estate agents sure don’t! They didn’t know when they valued it, so I doubt they know the future.
Perhaps I will buy it back one day?