Real Estate Appraisal : How to get a free appraisal

Did you know that an accurate real estate appraisal, also called a house appraisal can make the difference in ensuring your home for the highest possible sale price or if it will sell at all?

I’ll be honest, the property appraisal process can be very misleading for many people who would like to sell their home. But it doesn’t have to be like that. With a little know-how, you can become more aware of the process to help you make sure the real estate appraisal you get is accurate. 

Getting an accurate property appraisal is a must before putting it on the market. 

You could be a homeowner or own an investment property, having the correct appraisal will make sure you can budget around your property’s potential sale price. 

In today’s blog, I will cover the best ways you can get your property valued and also common mistakes you should avoid during the process

Let’s begin.

What is a real estate appraisal?

A real estate appraisal is the process of evaluating your property so that you understand the kind of sale price you can expect when you decide to sell your property. Getting a licensed agent is an important part of this process.

Home appraisal cost is zero. Yep, real estate agents don’t charge for these. They offer them for free in the hope that one day you will sell through them.

You can read more about Real Estate Market Appraisal on the Qld Government webitsite. 

   Types of real estate appraisals

  • Sales Appraisal

      A real estate sales appraisal can also be called ;

  • Property appraisal
  • Market opinion
  • Market update
  • Free market appraisal

They are all the same thing. For people who are considering selling either immediately or within the next 12 months. They need an indication of the home’s value so they can do some budgeting and start making plans. Getting a free appraisal today is the best place to start. 

Real Estate Appraisal : A photo of a large main bedroom on the sunshine coast featuring large windows and a view of clean canal

    Capital gains tax appraisal

  • These are fairly interesting. If a property owner is moving out of their home and then turning it into an investment property. They must document the current market value at the time they vacate. This will impact their capital gains tax when they eventually sell. You can find out more about capital gains tax in this article I’ve written.

   Monitoring the market

  • I do this for myself all the time. About every 6 months. I have a spreadsheet of my properties and my children are with each property’s value. I then do a market analysis to see what the value of each property is now. I love seeing our wealth grow. You might have seen Facebook is full of ads for four real estate agents offering a report on your property value. They do this to make a connection with you, and in the hope that when you do sell, they will be the real estate agent you choose.

   Using equity to buy an investment property

  • If you have built up equity in your house. you can use that as a deposit to buy an investment property. I never save up the cash to buy an investment property. To know what’s possible you can get a free house appraisal. 

   Real Estate Appraisal and Insurance

  • Real Estate agents have this odd strategy where they tell homeowners it’s a good idea to get an updated house appraisal so they know the current value of their home for insurance purposes. The thing is it’s a myth.
  • If the agent’s house appraisal value is $1M that’s for the entire home and land. Insurance companies insure homes and real estate agents are not qualified to know the replacement cost of a home for insurance. So why do they suggest this? They are simply trying to obtain homeowner contact information in the hope that when the owners do decide to sell they will sell with that agent because they have previously met them

    Rental appraisal

  • These are not carried out by a real estate agent. They are done by a property manager. Giving the property owner an indication of potential weekly rental income that’s possible.

Property valuation vs Real Estate Appraisal

Real estate appraisals can’t be used by banks for mortgages. Property valuations by a licensed property valuer are needed for this. You can read more about property valuations in another article I have written. 

The ATO seems to be comfortable using real estate appraisals for capital gains tax on investment properties, however, you should clarify this with your accountant to conform to the legislation at the time. 

In-home real estate appraisal

The most common is where a real estate sales agent makes an appointment to attend to your home to view it and discuss its potential value.

    One visit or two

  • Sometimes a real estate sales agent might need to look through the home first, then do some research and return to discuss the property’s value. Where possible it’s my preference to do research before my first appointment. Often this allows me to arrive at the owner’s property prepared with the information I’ve researched. Allowing me to discuss the property’s value at our first meeting. 

Online appraisal estimate

There are now several websites that offer online appraisal estimates. These are great to get a very fast very rough idea of a possible sale price. But they really should be illegal because they are always wrong so can be very misleading.

Remote real estate appraisal

Every real estate agent can research your property online and send you a report of its potential value. Most real estate agents are not that interested in carrying these out because they would prefer to meet with you in person to build a relationship in the hope that they will get your business when you do sell. If you have a property on the Sunshine Coast Qld. I’m happy to do a remote appraisal. Just ask. 

Which appraisal is best for you?

Real Estate Appraisal : A stylish bedroom with a bath and views on the Sunshine Coast

In-home, Online, or Remote. 

While online property estimate tools are fast and you can use one right now. They are just not correct enough. So have a go and have fun, just don’t rely on them. 

Remote House Appraisal: If you don’t plan to sell but are just wondering the value of your property. A remote real estate appraisal is ideal. If you are on the Sunshine Coast shoot me a message and I will get one to you. 

If you do plan to sell. Either right now or in 12 months times you need an in-home real estate appraisal. These will give you the best indication while also allowing you to meet a real estate agent to ask other questions

In Home house appraisal questions to ask if you are having an in-home appraisal, it’s fair to assume you have a certain level of interest in selling. Either now or in 12 months.

Here are the questions everyone asks me when I do property appraisals

What’s the market doing?

What will my home sell for?

When’s a good time to sell?

Is there anything we should do to the home before we sell?

What are the fees to sell?

How much does marketing cost or is it free?

What marketing do you recommend?

What’s the best way to price the property?

Why should I sell through you?

How long would it take to sell?

What real estate agents use to perform a home appraisal appraisal

I used RP Data. I’ve also used Price Finder. Both these are the main subscriptions real estate agents have access to for performing real estate appraisals. 

What should a real estate appraisal look like?

Many real estate agents will just supply the homeowner with a list of what has sold nearby. Sadly they do this to avoid giving a homeowner their thoughts on a possible sale price. Which I will explain later. 

Ideally, the real estate appraisal should have properties that sold in the last 3 to 6 months that are considered comparable to your property,  3 photos of each property, and comments on how each property compares to the owners and why

Sneaky tricks real estate agents use to secure your business.

Sadly. When a homeowner is considering selling, they contact some real estate agents. They can be opening a Pandora’s box. It’s common knowledge real estate agents have a bad name & it’s easy to see why. Here are some of the things  many real estate agents will do when you ask them for  a real estate appraisal 

    Makes you want to sell even though you aren’t

  • Many real estate agents are desperate to secure a home to sell. When they hear someone might be selling they morph into pesky monsters. Pressuring people to sell. Lying about the sale price. Lying, they have buyers they can bring through today. Taking up a lot of your time about how great they are and how great the market is. 

    Hounding you

  • Once they’ve been invited in. There’s no getting rid of them. I know one agent who was knocking on the owners’ door at 8 am the next day to pressure them to sign with them. Instant phone calls. Arriving at your home uninvited. Calling you all the time.  If I do a real estate appraisal for you. I will be professional and helpful. I won’t pester you in any way at all. Promise. 

    Trick you to sign a 90-day exclusive agreement with you

  • I’ve spoken to owners crying because they signed a 90-day exclusive agreement with a sales agent and then regretted it. They wouldn’t leave. They talked and talked. I couldn’t get rid of them. They came back uninvited. Its wild agents do this and wild people would sign a legally binding document under pressure. It seems it happens a lot more than people realize & it’s just one of many reasons real estate sales agents have such a bad name. 

    Buying a listing

  • It’s embarrassingly common for agents to lie about what your property will sell for. They are very very good at tricking you. You might want $1.6M, They agree that’s possible. But then after months, you sell for $1.2M. At the time it all made sense to you and you believed everything they said. Why wouldn’t they agree with you on the price and were so nice? 

    Telling owners what they want to hear

  • No wonder agents have such a bad reputation. They are trained to tell people what they want to hear. Even if they know it’s not true. “I’ll have it sold before the weekend”, “You want $1.8M. I’ll get you $2m”. “I have 5 buyers that want a home just like yours”.

    Avoiding the sale price

  • Look out for agents you call in for an appraisal and they just avoid the sale price. They are very good at that. 

    Talking about selling and not the price

  • Often real estate agents will talk about everything but the price. Selling, marketing, buyers. Just not the actual price they think the house is worth. Which is why you called them in the first place. 

    I have a buyer

  • Be careful of agents that tell you they have a buyer & can bring them through. 

    What if I can get you $2M

  • You want $1.8M. But what if I can get you $2M? We should find out. 

    Who am I to decide the sale price?

  • There is a theory in real estate that it’s not up to the sales agent or even the owner to have an opinion on the sale price. It’s actually up to the buyers. Yes, this is true to an extent. But real estate agents usually do have a rough idea of what most properties will sell for. 

How to take control of the appraisal process

Professional real estate agents should be in control of the appraisal process. But as the homeowner if you feel they are doing everything but talking about the value of their property. 

As the owner you should be direct with a real estate agent

  1. Can we discuss the possible sale price first
  2. It is not worthwhile discussing marketing, fees, band, and buyers if my home won’t sell for a certain price
  3. Can you show me in detail how you came up with that price?

Time a real estate agent appraisal takes

I can do an in-home real estate appraisal in less than 10 minutes. Mainly because I’ve already spent considerable time doing research first.  The time I am at the property depends on the owner and what they would like to talk about. Other against can be at a property for an hour and still not have discussed the actual sale price

How to know if a real estate appraisal is the correct value?

Many agents try to be very vague about a potential sale price. For you to ensure what they are telling you is correct, ask for evidence. They should be able to show you at least 3 properties that have sold in the last 3 months & explain why they are comparable to yours. 

How many real estate appraisals do you need?

 Ideally just one.

 If a homeowner pays a licensed valuer $600 for a property valuation. That’s it. The $600 is paid. The homeowner is not going to pay another $600 to get a second one. 

It frustrates me so many real estate agents use tricks when doing sales appraisals.

With real estate appraisals, a homeowner should be able to get just one, too. Often they might get 3 or 4. 

Why? 

Well,l they are free. But now you have 4 hungry real estate agents beating down your door. 

But people usually get more than one because they don’t trust the first one they have received. Usually, because the sales agent’s appraisal was not comprehensive. 

Many years ago. I sold a home for a couple divorcing, and 4 agents told them pricing from $650k to $800k. I told them $575k. It sold for $610k. I got the business because I was the only real estate agent that showed them detailed proof. 

Home appraisal : A modern apartment living space with large windows facing the ocean on the Sunshine Coast.

What the owner wants based on the maths, vs the market value

Commonly, homeowners work out how much they will need to sell their property, for the maths to work. 

Home owners will think “If I sell for $2m. I can pay off my $500k mortgage. And then downsize to a $1.5M house and be mortgage free.”

OR 

“If I can sell for $800k. I will be able to upgrade to the home we saw on the weekend for $1.4M”

It’s natural human behavior and fair enough. This is often how homeowners come up with what their house will sell for. It’s not actually what their property is worth. It’s what they need to make it work. It’s what they need to make selling worthwhile. 

What’s criminal is when an agent then tells the owner yes their home will sell for $800k. When they know it would only sell for $700k. They take marketing money and the owner’s time to go to market for a price they will never get. 

Why real estate agents dance around the price

Property market appraisal : A stunning staircase design in a Sunshine Coast home.

Real Estate Agents lose business for a few main reasons. 

The price they tell the owner the property will sell for

Marketing costs

Agents commission

When I am invited into a home for a real estate appraisal, I like to discuss the possible sale price of a property first. If the owner wants considerably more money for their home than what’s possible there is no need to spend time talking about fees, marketing, and the sales process. 

Unfortunately, so many real estate agents just lie about the price a property will sell for. They over-inflate it. They get chosen as the agent because of the great price they will be able to get. Then over time, they pressure the owner to reduce the price so they can sell. It’s called “conditioning the vendor”

I lose listings to other sales agents all the time because of this. Which is OK. I would much prefer to be honest and sleep at night than to lie and disappoint the owner when the property does not sell because the price is too high.

In fact. No one has ever engaged my services because of the price I have told them. I try to be conservative with my appraisals. 

 

Should you tell real estate agents the price you hope your property is worth

I must admit I do like to ask homeowners what price they had in mind. It makes me laugh. While many tell me their price, some like to keep that figure a secret. 

Which is a bit like going to the doctor with a cold and getting them to guess what’s wrong with you. 

Just tell me your price. I am going to tell you mine, anyway. 

Say you think your home will sell for $1.5M. I might have evidence that shows it would sell for more like $1.3M and I will tell you this. I’m not going to then lie and increase my appraisal to $1.5m.

Unfortunately for me. Many sales agents will tell you $1.5M even when it’s not true. They will also be very good at how they present how they came to the incorrect figure of $1.5m, making engaging their services irresistible. 

“Sorry Byron but we’ve gone with another agent because they see more value in our home than you” 

In the industry there a sayings” Don’t choose a real estate agent on the promise of a price” and “Are you choosing an agent on the price they choose or their process” 

  The easiest way to win your business

  • If you are selling your home. I would love to be the sales agent you choose. The easiest way for me to do that is to jump on the bandwagon with other real estate agents and give you a high price your property would sell for. But that would be wrong. I realize that by being honest, I might lose your business, but that’s OK with me. I’ll sleep at night. 

My home appraisal process?

   2 hours of research on the property before attending the home

  1. First I like to do as much research as I can before attending the home. Often I will spend up to 2 hours looking at comparable sales.
  2. Using RP Data I can usually see photos of your home. Then I can run reports of what’s sold around your home in the last 3 to 6 months. 
  3. I like to sort the properties from highest to lowest sales price. 
  4. I come to an indication of a range. For example, it would seem like properties over $1.8m  are superior to yours, and properties under $1.4m are inferior. 
  5. Now I can drill down on properties sold between $1.4M – $1.8M.
  6.  I will look at ; 
    1. Age of the home
    2. Construction of the home
    3.  Landsize
    4. House size
    5. Features
    6. Condition
    7. Quality of fixtures and fittings 
    8. Updates, 
    9. Renovations. 
    10. Number of bedrooms 
    11. Number of bathrooms
    12. Car spaces
    13. Pool or shed
    14. Aspects and views. 
    15. The street & location.
  7. Looking at comparable properties I also consider ; 
    1. The number of days each property took to sell
    2. The text of the real estate ad. 
    3. The pricing strategy used to sell it.
    4. The initial advertised price vs the last advertised price. 
  8. Current market
    1. Is the market currently going up, down, steady
    2. Is buyer activity high, low, or steady
    3. What time of year is it if you are planning to sell soon

All this gives me clarity not just on the potential value of your property but also on how long it would take to sell the property.

I’ve not met very many other real estate agents that invest this type of time with an appraisal. I feel this is a very important part of the entire process. 

A modern living room featuring high ceilings on the Sunshine Coast.

   At the home

  • I have now done considerable research and have not even seen the home yet. When I do arrive at the home I just need a quick look around to confirm the property is how I thought it would be based on the research done. If it’s as expected then my expectations on a real estate appraisal would be fairly accurate.

   If you have made improvements

  • If you have added a pool or shed or updated the property. I can still do research before coming to the home as long as you disclose this to me. I will simply look at previous online data of your property and compensate for the improvements you’ve made. 

   Major renovations

  • If you have done major renovations. Knocked out walls. Added big decks. High slacker doors, additional rooms. Then I probably do need to see the property in person first. I did that to one of our homes in Buderim. We did an extensive renovation that had to be seen. We moved the kitchen. Put in very high spacer doors. Knocked out walls. Added glass railings and more. The home was different from any online data people had access to.

   Your price vs the appraisal price

  • I  like to ask what price owners hope for. If their price is the same as the appraisal price I have come with theirs not much more to discuss. You want $1.4M and I agree. What I find is if the owner has hopes for a price and the comparable properties that have recently sold show that’s not possible is when a quality conversation is needed & sold data needs to be looked at in detail. 

   Comparing your property to comparable sales

  • I mentioned how I might knock out properties that sold for under $1.4M. I will still bring these with me to show you your property will sell for more. I will do the same with the property that sold over $1.8M. You might be hoping for $2M and when I bring comparable sales up to $2m we can look at these to confirm all the properties that sold for  $2M are superior to your home in one way or another.

   Looking at live data on my iPad

  • The printed appraisal report only shows a maximum of 3 photos of the property. With the properties I feel are most comparable to the property in the appraisal  I like to show the owners this one on my iPad, where they can see all the photos and floor plan. Of course, only if they are interested. 

Do estate agents get appraisals wrong

While I spend considerable time analyzing my appraisals. They are never 100% accurate the the properties sold for the exact price of my appraisal. . No one knows the exact sale price a property will sell for. I usually tell homeowners that based on these comparable sales your property should sell for around  $1.5M. But that might mean $1.4M or $1.6m. Or around $950k might mean $925k or $975k

What if there are no comparable sales

This happens a fair bit. With particularly unique properties, often there are just now other properties that would be considered comparable. When this happens I look further back in time. Sometimes up to 2 years back, then add capital growth to the sale price. Plus increase a radius search from 2 – 5km to 10km. While not ideal, sometimes it’s necessary. 

If no comparable sales can still be found then, it makes it very complicated to just “guess”. This is where going to market with no price needs to be considered as getting feedback from buyers about pricing. 

Real Estate Appraisal vs. Advertised Sales Price

A ensuite bathroom with a bathtub facing the bedroom on the Sunshine Coast.

As an example, a property I sold indicates a sake price of around $950,000. This does not mean this is the price it will sell for. It’s just a guide. The example I am referring to sold for $967,500. But it can also go the other way and sell for less. So a real estate appraisal of $950,000 does not mean that is the price you need to advertise the property for. You need to structure your advertised price to ensure you don’t undersell your property. Which is an entire other conversation. 

The most common real estate appraisal is when someone would like to sell their property. First, they like to get an indication of its potential sale price. For these, they usually speak with a real estate sales agent or possibly a few real estate sales agents to have the property appraised. Imagine setting an asking price for your home based strictly on gut feeling. Without real belongings appraisal, you might risk overpricing or underpricing, some of which undermine your sell process. Property appraisals provide an unbiased judgment of your home’s value, ensuring that the price aligns with market conditions.

Lenders lean heavily on precise appraisals to mitigate commercial enterprise risks. They need an authority that their investment is sound, and evaluation offers just that. Moreover, appraisals can insignificantly influence negotiations between buyers and sellers, serving as a neutral ground to settle on a price. Thus, the standing of valuations in property transactions cannot be overstated.

Selling your home

Now that you have a market value report you should now be able to do some budgeting around selling your home and making a plan. If you are on the Sunshine Coast and have any types of questions about selling just reach out to me. I won’t give you any pressure, just friendly professional advice. 

People also asked

    What is the difference between a property valuation and an appraisal?

  • Real estate agents are not licensed to do property valuations. A high-quality real estate appraisal is very similar to a property valuation. A property valuation can be used for bank loans. A real estate appraisal can’t. 

    What is the difference between a market appraisal and a valuation?

  • Market appraisals are carried out by Real Estate Agents. They are free. They are usually used to give a property owner an indication of a potential sale price. A market appraisal can’t be sued to secure a bank loan. Valuation needs to be carried out by a licensed valuer. They can’t be done by a real estate agent. Valuations are not free. If a valuation is being carried out by a bank, the bank will cover this cost.

    How do you prepare for an appraisal?

  • Many homeowners feel they need to clean up as if the property is having an open home. For a real estate appraisal, you don’t need to spend time doing this. Real estate agents are used to seeing many houses, and they can see past how the property is currently presented.  If you’d like to clean up because it would make you feel more comfortable then yes you should do that. 

   Are appraisals close to the asking price?

  • They should be close. A real estate appraisal should give the owner an idea of the potential sale price with the idea of  selling close to it or even for more

   Are property appraisals free?

  • Yes. a real estate appraisal done by a real estate agent is free of charge. Property valuations carried out by licensed valuers are not free. However, if you have a property valuation carried out for a mortgage, the bank will cover this cost.

   How long is an appraisal good for?

  • A real estate appraisal is usually accurate for around 3 months. After that, the market has probably moved where the value of the property has changed slightly. 

Other articles with helpful information

Contact Byron today.

Shoot me an email.

I’m a licensed real estate agent on the Sunshine Coast Qld Australia. I have over 20 years of experience selling residential property and managing & selling investment properties here on the Sunshine Coast.

Let me know how I can help you.

bryon
bryon