Why you should appraise your agent before getting a property appraisal

by Alistair Helm in

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The real estate industry traditionally encourages sellers to seek a property appraisal from a number of agents as part of the process of listing your property for sale. I believe this is a broken model and needs to be challenged.

I hold the view that you should appraise your agent before you even talk about your property. Why would you choose an agent based on what they think your house is worth, and especially more so because they think your house is worth more than another agent?

Agents have access to extensive property information these days and naturally combine that with their experience and competency to ‘read the market’. Now the reality is, all agents have access to the same base set of property data, extensive as it is; the truth is that the same information is provided to all agents. Now evaluate that fact against the fact that a competent agent based in a local market will have as good a ‘read of the market’ as any other local agent and you should be able to see my point that you should evaluate an agent before they even step into your house.

Surely you want an agent that you can work with, an agent for whom you have a sense of a chemistry, an agent that can show you recent examples of marketing campaigns and satisfied clients; an agent who is more than happy for you to reference check their recent satisfied clients.

So why do people choose agents based on nothing more than a bidding process?

 A bidding process that has nothing to do with outcome (the final sales price / net proceeds after commission) and everything to do with a prospective evaluation of what a property might sell for – no guarantee (sorry!)

Returning to the point made earlier about property information. Real estate agents have two companies in NZ providing property stats to base their Comparative Marketing Assessment (CMA) as required by the regulatory body the REAA. These are Terralink with their Property Guru solution and QV with PropertyIQ service. Both of these solution provide historical details of every property sold in NZ from the government land transfer records, additionally they both (although from different sources) provide details of historical property listings, finally both companies provide an algorithm which creates a valuation estimation for every property – the same valuation system that provides for the electronic valuation you can get from QV and Zoodle respectively. The agent systems do allow some tweaking of the input properties to ensure a weighting is applied to more suitable properties.

So in summation the data set and systems behind every real estate agent is the same, there is interpretation input, which is as much a function of agent competency. Add this to the competency of a local 'sense of the market' and professional presentation and I would argue that you should appraise your agent before getting a property appraisal – don’t be suckered into choosing an agent purely on price.