Selling Your Home? Why the Highest Property Appraisal Isn’t Always the Best One

If you’re thinking about selling your home, chances are one of the first things you’ll want to know is: “What is my property worth?”

It’s a completely reasonable question and when you speak with a few real estate agents, you may find the answers aren’t always the same. One agent might say $850,000. Another might suggest $900,000. Someone else might tell you they believe they can achieve even more.

It can be very tempting to choose the agent who gives you the highest figure, but after many years in real estate, one thing I’ve learnt is that the number you are given is only part of the conversation. The real question is: what is that number based on?

An appraisal should tell a story:

When I complete a property appraisal, I don’t believe the job is simply to walk through a property, take a few notes and put a figure on it. There needs to be reasoning and evidence behind the figure.

In Queensland, when a real estate agent provides an estimated value for residential property, the agent is required to provide a Comparative Market Analysis (CMA), or where a CMA cannot be prepared, a written explanation of how the market value was determined.

A CMA looks at comparable properties and provides a basis for the agent’s opinion of where the property sits in the current market. That means looking at things such as recent comparable sales, location, land size, property features, condition and how the property compares with other properties buyers may also be considering.

Most importantly, recent sales tell us what buyers have actually been prepared to pay. An advertised price is not the same thing as a sold price. That distinction is really important when you’re making a decision about your own property.

Why two agents can give you very different appraisals:

There isn’t necessarily anything wrong with two agents having different opinions about what a property may achieve. Property isn’t an exact science, two properties that look similar on paper can perform very differently depending on presentation, location, features, buyer demand, competition and the overall selling strategy.

Where I become cautious is when a higher figure can’t be properly explained or supported.

I’ve seen situations where a seller is understandably drawn to the agent promising the biggest result, only to find that the property doesn’t attract the level of interest expected once it reaches the market. That can leave sellers questioning the price, the strategy and sometimes the agent they chose.

The market doesn’t care what we want the property to be worth:

This is probably one of the hardest parts of selling.

As an owner, you’ve invested money, time and memories into your home. You know its improvements and the things that make it special, but buyers are looking at it differently. They’re comparing your property against everything else they can buy with their budget.

That’s why a good appraisal needs to consider the market from the buyer’s perspective as well as the seller’s.

A figure might sound fantastic when you’re sitting around the kitchen table discussing your options, but if buyers don’t agree with that figure, the market will tell you fairly quickly.

A CMA can help separate opinion from evidence:

This is where I believe a well-prepared CMA is valuable. It doesn’t guarantee a particular sale price, because no appraisal can do that. What it does provide is a more informed starting point.

Looking at recent comparable sales, current competition and the differences between properties helps build a picture of where your property sits in the current market.

Sometimes that picture supports a higher figure. Sometimes it doesn’t. While it may not always be the answer a homeowner was hoping for, I’d much rather have an honest conversation about the market before a property goes online than have a seller discover afterwards that the asking price was unrealistic.

Choosing your sales agent is about more than the appraisal figure:

The appraisal is really only the beginning. You’re also choosing the person who will advise you throughout the selling process: from preparing the property and determining the marketing strategy through to negotiating with buyers.

So, when you’re comparing agents, I think it’s worth looking beyond the biggest number on the page.

Look at the reasoning behind it. Look at the evidence. Look at whether the agent can explain how they arrived at their figure and what they believe will actually attract buyers. And perhaps most importantly, consider whether you feel you’re being given an honest opinion rather than simply being told what you want to hear. After all, the goal isn’t to have the highest appraisal sitting on your kitchen bench. The goal is to achieve the best possible result when your property actually sells.

If you’re considering selling and would like to understand where your property sits in the current market, I’m always happy to have a conversation and talk through the evidence behind the numbers: without any pressure or obligation.

Sometimes having an honest conversation before making a decision can make all the difference.

A note from Distinction Realty:

This article reflects my professional experience and general observations as a Queensland real estate professional. It is provided for general information only and is not legal, financial or valuation advice. Property values and market conditions can vary between properties, locations and individual circumstances. For advice specific to your circumstances, appropriate professional advice should be obtained.