Market appraisals

WE’VE HEARD it far too often. The so-called “industry experts” and media commentators telling you that the best way to choose an agent is to simply obtain 3 “Market Appraisals” with the aim of choosing the agency that offers you the middle price!

In this theory, the agent that suggests the ‘middle price’ is supposedly more ‘on the mark’ than the other two agents. This is because, according to their thinking, the agent who quoted highest is “buying your listing”; and the lowest priced quote is given by someone who simply doesn’t know what they’re doing!

In other words, the agent with the highest quote has told you that your property is worth a price they hope you’ll find irresistible. (Of course, on the face of it, if one agent said you should list at ten thousand dollars more than the next agent, it’d be a pretty attractive proposition, wouldn’t it?) Well, perhaps. But like everything there’s more to it than meets the eye, and we’ll look at this more in a minute.

What about the agent who quoted the lowest figure? Well, the theory goes that they simply don’t know what they’re talking about and won’t try hard enough for you!

So you’re told that the agent “in the middle” is your best bet.

If you were to blindly go with the advice from these so-called “experts”, you potentially stand to lose out – big time. You see, this strategy assumes all three agencies offer a comparable service and are similarly placed in the crucial areas of marketing and negotiation skills.

Of course, nothing could be further from the truth! Choosing an agency using this strategy is potentially fatal. It could easily lead to the “under selling” or “over selling” of your property and the loss of thousands of dollars.

The Key: 

Choosing any agent based purely on the basis of obtaining three quotes and then going with the ‘middle ground’ quote can cost you dearly - in time and money. There are other, more important criteria to consider when choosing an agent, which brings us to the second fatal mistake… No Interview = No Information = Thousands $$$$$ Lost. But first, a cautionary word…

Under Selling is clearly dangerous. 

You could stand to lose thousands of dollars in the negotiating process, particularly if your agent isn’t a highly skilled negotiator – and after all, only a poor negotiator would list a property under its true value to begin with. 

Over Selling is where the listed price is higher than what the market will bear. 

This is dangerous, as it will severely limit interest in your property and lead to an increased time on the market, impacting negatively on its perceived value and eventual selling price.

The Middle Ground appraisal in fact may well be still under selling or overselling the property! How will you know unless you have a thoroughly prepared CMA to go by? Don’t automatically assume the middle quote is correct. 

Ask for a Comparative Market Analysis (commonly referred to as a ‘CMA’).