While there are plenty who claim expertise in the art of valuing homes, the reality is that it’s a little more complicated and less predictable than one might think.
Recent news highlights Australia as having some of the priciest accommodation in the world. As a nation with an iconic property market, it’s no surprise how the topic of house valuation has slowly integrated itself into the average Australian day. Even among non-homeowners, estimating the selling price of houses has become a sort of hobby; many attend auctions despite not having any intention to bid for a property.
While there are plenty who claim expertise in the art of valuing homes, the reality is that it’s a little more complicated and less predictable than one might think.
House Valuation: Location, Housing Features & Circumstance
The basis of house valuation predictably involves the essentials of the house itself. The assessment method is as follows: evaluating the property’s location, land value and accommodation, followed by any additional features such as swimming pools, landscaped gardens and development restrictions.
After all primary information is gathered, they are pooled into comparable sales data as required under Victorian law since new underquoting legislation was made effective on May 1, 2017. Underquoting refers to the practice of misleading a buyer about the likely sale price of a property. These laws necessitate that agents provide potential buyers with details of three comparable sales in a statement of information, as well as an indicative selling price no lower than the seller’s asking price.
Mixed reviews accompany this newly implemented law: some express disapproval over the unseemly properties chosen for comparison, but, most experts have deduced the impact to be generally positive.
“The new price-quoting legislation has seen a shift in the manner in which agents advertise and quote property prices, with a reduced margin between the advertised estimated price and the actual sale price,” says Real Estate Institute of Victoria president Richard Simpson.
Despite such practices guiding property price-listing processes, things could still change during a sales campaign, based on interest recorded at open for inspections.
Jellis Craig director and auctioneer Dallas Taylor brings one last unforeseeable — and very crucial — factor to attention: emotional attachment.
“There’s an element of emotion there that you can’t put into the equation when valuing a property. Emotion might come from the buyer’s parents living around the corner or a triple garage that would be perfect for a home business,” Taylor says.
High demand is, of course, another factor that greatly contributes to the pricing of any particular property. RT Edgar director Oliver Booth provides a possible scenario favourable to landlords: “If you’ve got three people who all like it and all want it, the price is going to go up.”
Which is precisely what’s been happening in all property hotspots all over the world. All the time.
Which are your favourite suburbs in Australia? Let us know in the comments below!
By Nimue Wafiya
Source:
https://www.domain.com.au/news/how-the-experts-put-a-value-on-melbourne-property-20180302-h0vyop/
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