Why You Shouldn’t Believe the Advertised Price On Realestate.com Or Domain
Dilleen Property Group 2021
You may be wondering, what does the advertised price on Realestate.com or Domain have to do with how much the property is actually going to end up selling for?
Over the years, personally I have found that there is no correlation between the actual value of the property vs what the advertised price was.
When a property is listed for sale on Realestate.com or Domain, a real estate agent has to list the property with a price. Behind the scenes the real estate agent will talk to the vendor or the seller and ask what time frame they would like to sell the property in (can be 3 months, 12 months, or they can just be testing the property market). This time frame impacts the price a real estate agent will recommend for the property listing.
At the end of the day, a real estate agent or anyone selling a property can list the property at whatever price they would like to. It may be slightly near the vicinity of what the value of property is, however it is often not close. For example, in the past I have shown a property that was on the market and the agent and vendor were accepting offers that were over $300,000, and it sold for $305,000. However Eddie spoke to a particular bank that had valued the property for $340,000. As another example, a property could be listed by an agent for $500,000, however its value could be $460,000 or it could be $540,000. Ultimately there can be a 20 – 30% variance of the advertised price compared to the actual value of a property.
What happens behind the scenes is that a real estate agent can change the price at anytime that they would like to with just a click of a button on their phone. A good tip to know what the actual value of a property is, is to have a look at what properties have sold recently within the area that have comparable features, and also seeing how banks value properties (there are 4 types of bank valuations).
It is important to note that if you are looking at purchasing a property, you can speak to a lender or a broker and request a bank valuation to understand the real value of a property.
The key is to not always take the advertised price for the actual value of a property. Just because the property is listed at $500,000, it is important to know that it could be worth more than that or it could be worth a lot less than that. This is why it is important to do your own research, look at comparable sales within the area, and talk to people who have actually invested in property before and know what is involved.
Disclaimer: This is not intended as legal, financial, or investment advice and should not be construed or relied on as such. Before making any commitment of a legal or financial nature, you should seek advice from a qualified and registered legal practitioner or financial or investment adviser.
