Can an app tell the cost of a home? The answer is 'no'.
But recently there has been an onslaught of property-valuing applications and reports made available, which give a rough estimation of what a home is worth.
This includes services from CoreLogic RP Data, Domain, REA Group and RealAs, which use a simple, user-friendly model. Input the address of the property you are interested in, hit send and two figures pop up: the estimated lowest sale price and the estimated highest sale price for the property. Of course, there can be a difference of $100,000 to $200,000 between these two numbers.
As agents, we know that there is no one broad-brush approach for every real estate market in Australia. However, that’s exactly what these reports try to achieve.
These services have used mathematical logic to solve an emotive problem. Vendors and buyers are fuelled by emotion, desire, excitement and, at times, competition. A buyer may walk into an auction with a clear vision of their children playing in the backyard and bid accordingly. Vendors often believe their home, with its unique feel and look, is worth more than the market will actually pay.
Unfortunately, these apps don’t take any of this into consideration.
So what can we do as real estate agents to ensure our clients, both buyer and vendor, are getting the right information?
Here are my three tips:
1. Don’t bury your head in the sand
With the evolution of data sharing we have to be prepared to respond to Mr and Mrs Vendor when they mention these reports in appraisals and vendor meetings.
More and more we will hear: “But this says our home is worth X?”
This is a really great chance to have an honest conversation about price from the start. Try getting the conversation flowing with the following questions:
- Have you consulted any other property-valuing apps? If so, what did they say?
- What’s your thought on the opinion of your property’s worth?
- What happens if the buyer wants to pay more than the app has valued your property at?
- Would you accept a price that is less than the app has quoted?
2. Know your numbers and market
Nothing has changed on this end. As a real estate agent, you need to be able to articulate the intricacies of your local market. Knowing your numbers, including data on median price movements, sales volumes, recent sales and even being able to quote buyer feedback, will position you as a local area specialist and further diminish the opinion of such apps.
After all, an application can give you an indication of worth, but it can’t influence the market, nor can it have the hard conversations with buyers when it is negotiation time. Let your history and experience talk for itself when dealing with a vendor or buyer who is relying heavily on one of the property valuing applications.
3. Show your worth with superior customer service
Finally, after all is said and done, ensure you are going above and beyond for your clients and buyers. Always operate in an open and honest manner and take time to get to know your clients and their home. Show interest in them – we’re in the customer service industry after all!