How Accurate Is "Price Guide" on Real Estate Website?

• 

  Jimothy Wongingtons on 20/06/2023 - 20:35

  +3

  Been like this for ages

  • 

    [Deactivated] on 20/06/2023 - 20:42

    +3

    Yep - the recycling of subjects definitely has

• 

  Hybroid on 20/06/2023 - 20:40

  +12

  You seem quite new to property searching. It's going to be a long, bitter, frustrating, painful, expensive, much-wasted-effort filled path. Good luck.

• 

  localhost on 20/06/2023 - 20:42

  Usually is 20-30% below. Pretty accurate.

  • 

    ssfps on 20/06/2023 - 21:44

    Historically, or in the last 2 years?

• 

  dtc on 20/06/2023 - 22:05

  +2

  Did you seriously consider a property but not bid because you didnt like the agent or it was too cold? Gonna be homeless for a long time if you need to like the seller's agent or have perfect weather before you will bid.

  Do some research, go to some auctions, check out the auction results, figure out values yourself and you will be in a better position. Or only look at private treaty places.

  But short answer - agents will give the vendor an estimated price range eg $600k to $660k. Cant be more than 10% range. They will quote the bottom of that range. This range is not what the seller wants, its what the agent estimates. The seller can hold out to sell for $800k if s/he wishes; but realistically the seller will not be selling at the bottom of the range most of the time; so that $600k guide is the minimum and you need to allow at least 5% and more realistically closer to 10% above what is quoted - and thats assuming the seller isnt holding out for more and that no one buyer is happy to pay more anyway.

• 

  ihbh on 20/06/2023 - 22:10

  You're clearly a novice with all the whinging. Why don't you make your best offer and see if the buyer will accept it? You can also try low ball offers and all the way to your best offer first and see how you go.

  If it's cold and you're too lazy, etc., take a break and resume when you feel like it, otherwise it could drag on for a long time.

• 

  p1 ama on 20/06/2023 - 22:29

  +3

  Ultimately it doesn't matter what number the agent wants to put - the market determines the prices, not the agent.

  If the agent underquotes, then the market will bid up the price (either at an auction, or through negotiation). If the agent overquotes, then the market will not pay the price and will bargain down the price.

  You need to do your own research and figure out how much that property is worth - e.g. what is the median in that suburb, what have other properties close by sold for in the last few months, are there certain factors about the property you're looking at which will increase or decrease the valuation. Go to the inspections and check out how many people are interested and walk around and listen as you're there - what are people saying, are they positive or negative, what are their reactions?

  It is kinda cold now and I am too lazy to go out for inspection if the price gonna be underquotted and out of my budget anyway.

  If you're lazy then you're either going to end up with nothing or you'll end up overpaying.

  Real estate is specifically an asset with very high informational asymmetry, so you have to go out there and do your own research and hit the road. The people who are able to do this and put in the time and effort will end up finding the bargains, the lazy ones end up with shit nobody else wants to buy or ends up putting in emotional bids well above market price. If you're lazy, then buy a diversified ETF and you won't have to do any research or bear the cold.

  • 

    ihbh on 21/06/2023 - 08:53

    informational asymmetry

    From a theoretical point yes, especially for the seller, but not as straight forward.

    Many investors have bought sight unseen interstate, or after 1 visit, etc.

    Also, suggests that specialists doing this would outperform once in a decade(s) buyers, and that we should use buyers' agents.

    There are many intangible factors at play, price cycles, being systematic & control of emotions … and luck or lack of. Also, the numbers game to take advantage of the luck. You could wrap up these last two into information asymmetry.

• 

  neil on 20/06/2023 - 22:37

  Price guides are based on:

  These are the three properties sold within two kilometres of the property for sale in the last six months that the estate agent or agent’s representative considers to be most comparable to the property for sale.

  So could be similar bedroom properties but different land size or could be missing floors, have major structural issues or who knows.

  My methodology which may or may not be right is to take several properties nearby that sold, then divide by lot size. So in the low end in my area, it's $5800 per sqm and high end of $7400. So with that low end, you'll know what the real range is to put a bid on.

  • 

    [Deactivated] on 20/06/2023 - 23:31

    My methodology which may or may not be right is to take several properties nearby that sold, then divide by lot size. So in the low end in my area, it's $5800 per sqm and high end of $7400. So with that low end, you'll know what the real range is to put a bid on.

    This will so appeal to the many Americanophiles on here even without the conversion to average square footage

• 

  trustnoone on 21/06/2023 - 00:28

  In Sydney what I've noticed (numbers aren't real, just examples):

  • If its for sale for $500K to $550K and been on the market more then 1 month, you can probably go for $20K less then the minimum (so $480K ish)
  • Back in the day when prices were crazy high, if you had $500K to $550K you were probably looking more for the average between the two
  • For Auction the price guide is ALWAYS about $100K UNDER. Now that could just be the ones I've seen, but I constantly see properties go for say $550K auction, only to get passed in and then be put for sale for $650K. Or go for $600K only to appear after the auction at $700K.

  Obviously this is just anecdotal but I will never look at an auctioned property at $550K and assume its going to sell for that.

• 

  Benoffie on 21/06/2023 - 07:22

  Always add a minimum of 10%. 20 if you want to be competitive (Adelaide)

• 

  mr_vino89 on 21/06/2023 - 09:44

  +2

  A few point for you to consider:

  • the price will be whatever people are prepared to pay.
  • price guides are quite conservative and not accurate. If you want a more accurate appraisal, you should have a qualified valuer value the property. even then, the price it sells for is determined by the market.
  • If you make an offer on a property, put your best offer forward. Given the amount of other potential buyers you are competing with, there is little room to negotiate.
• 

  pharkurnell on 21/06/2023 - 11:19

  What sort of place sells in shitney for 500k? 1 room portaloo?

• 

  Seraphin7 on 21/06/2023 - 11:35

  An auction price guide and a "for sale" price are different beasts.

  In my experience, you should expect an auction reserve to be 10 - 15% above the auction price guide.

  If it's been to auction, but not sold, the price they then quote will be much closer to the vendor's expectations.

• 

  jjjaar on 21/06/2023 - 16:01

  I’ve seen quite a few places recently with high price guides that have fetched 0 offers at auction, or passed in. They’ve then had a private sale price listed within (or above) that range post-auction, but have then slowly reduced the price over the next 1-3 months until it’s ended up selling under the original guide.

  Similarly, I’ve seen properties that appear to have an acceptable guide based on recent similar sales, but two bidders have loved the property and have taken it much higher and it’s sold for well over.

• 

  Ghost47 on 23/06/2023 - 18:14

  Just assume the place will sell for 2x what the price guide says.