‘But my friends, sister in law’s, second cousin’s step brother is a Real Estate Agent and he says it’s worth more’
This must be one of the most common statements you hear when you work in the Property Industry. Real Estate is a booming industry, now more than ever, and more and more people enter it every day, some who even do it as a consultancy basis on the side of their normal profession. I’m pretty sure if you think about it you all know a Real Estate Agent. Real Estate agents do play a vital role in the property market. Some people may have negative opinions on them however after being a sales agents for several years I will always have a profound respect for those who have mastered their craft. In saying that I am also quite quick to point out those who haven’t the slightest clue on how to do their job!
It is important to understand the difference in the view of a Real Estate agent in comparison to a surveyor or a valuer, the difference between an appraisal and a valuation. One key difference is that a sales agent’s appraisal is taken from sales evidence in the area, their knowledge of the sales markets timeline over the last few months, buyer’s behaviour towards certain areas and any neighbouring developments which are currently under construction. They would be able to give an idea on whether this would increase/decrease demand for the area in future. On the other hand, a valuer, looks more into the statistics of the sales evidence. This tends to be the main foundation for a valuation. They also look into the materials used to construct the property and also neighbouring environmental issues such as close proximity to power lines. A Valuer cannot conclusively determine the attitudes of buyers in the market as a valuer does not deal with the buyers on a daily basis. Also, Valuers are restricted legally to only use information which is lodged on Landgate and other registrar portals. This can often be a few weeks behind what is actually happening in the market whereas sales agents normally track their own records day to day. It is also very unlikely to have valuer, depending on the size of the firm, solely covering one area. They tend to cross into other suburbs more whereas sales agents tend to have more localised expertise.
A sales agent is, although some may disagree, an expert in their field. They are able to analyse the demands and trends in local areas and can often indicate the different factors appealing to buyers street to street. The downfall with sales agents is that, when it comes to valuations, their word is not their bond, meaning they cannot be held by this. Compare this to a valuation which is a legal document of which the legal responsibility falls with the valuer. In this regards the most common form of having a calculation is where an owner must involve the bank either for taxation purposes or for refinancing.
In summary, an appraisal is to give a rough idea of what the agent believes they can sell the property for. A valuation is the current true market value based on comparable sales evidence. I have highlighted the word true to keep any real estate agent readers happy!
Having been both a Sales agent and now working in the valuations industry I would like to think I have a higher than average understanding on how both professions link. At the end of the day a sales agent want’s to help you sell your property whereas a valuer has to be more stringent when looking at statistics. Having said that, I would still recommend to speak to an agent if you are considering putting your property on the market however be sure to research wherever you can to find out their performance and knowledge of your area.