I am sure you are aware that property valuations sometimes seem to be a mystery. We are told one value by one person and then another by someone else, then along comes the written valuation and it is quite different again.
Here is some very interesting insights into property valuations
The perceived value of a property can be remarkably different depending on who you are and who you are talking to. Although one would perceive that the value should be a set figure under all circumstances, it is in fact not that way at all.
A valuer will put a figure on a property but have you noticed that if you ask a valuer for a price they will want to know whether you are a buyer, seller or a mortgage seeker.
In essence the value of a property is only what it sells for. It is the price that the seller and the buyer have come to an agreement on regardless of any other factors.
It does not matter if the street the property is in is a friendly well kept street or whether the properties are of above average design, either way it still comes down to what the sale price of the property is. It does not matter if two years ago the prices for houses in the street were fetching a higher price or a lower price, it still comes back to the price today.
With this information in mind it is not hard to see why there is always so much discrepancy about what a property should be listed for and what it should sell for.
This is why when you are buying or for that matter selling a house, it is very important to have some recent history of the price being paid for similar properties in the area. Even though you do have those prices you do also need to know something about the street those house prices are coming from, because even within a suburb there can be streets that are above or below the average price for the area because of local factors. As well as that even two houses with the same floor plan can get different prices because one may have been upgraded inside and one not, or one may have a pool and one not.
Being aware of the fact that valuations are only the best estimate, will help keep you aware that the sale price may not be the valuation price.
If you want more clarification of the reason why this happens, then call me on ph. 1800 600 890 and have an obligation free chat.