Darwon's Theory | Promise the World and Deliver the Atlas

Four Corners recently undertook a crowdsourced investigation into the real estate industry, perhaps you caught it? From underquoting, to accepting secret referral fees, to blatant misconduct - what was exposed is unlikely to be a surprise to many of you. Today, I'd like to offer some tips to protect yourself before you even sign the dotted line. 

After speaking with over 100 people - agents and other industry professionals, as well as buyers and sellers - Four Corners published a list of the industry's 'secrets'. As experienced sellers would expect, one of those secrets has to do with over-estimating appraisals in order to win the listing. Unfortunately, it's an all too common tactic. So, here's how it happens - and how you can avoid it happening to you. 

A homeowner may ask two or three agents to appraise their home for sale. This is an invitation for us to provide an informed opinion about the potential market value of your home. It is each agent's responsibility to use their local area knowledge and recent, applicable sales data to provide an estimate of how much the property may sell for.

The problem arises when one (or more) of those agents inflates the property's estimated sales potential in order to beat the competition. They may significantly overestimate the value of some features of your home, its location, or buyer appetite.

On the other hand, an unrealistic appraisal could be the outcome of a data issue. In a highly volatile market, sales data goes out of date quickly. In those instances, the agent needs to rely on their own market knowledge. This is why our teams share what they're seeing on the ground - so all of our agents (and by extension, our sellers) can benefit from the most up-to-date information possible.

Some sellers are dazzled by the big numbers - simply, the agent who tells their the home is worth the most. But what can happen is that the listing will languish on the market, and potential buyers may wonder what is wrong with it. The agent may tell you the market has shifted, and buyers' appetites have changed. This will impact not only the sales price, but your ability to time the purchase of your next home. 

A realistic appraisal is key to a successful sales campaign. When you receive an appraisal, be sure to ask questions if anything is unclear. Ask how the agent came up with their figures, query anything you're unsure about. If you're interested in receiving an obligation-free appraisal, rooted in realistic and up to date data, reach out to my team. 

Cheers,

S.D.