Property Price Check in your Street!

With prices and demand for residential properties at an all-time high, why are we still seeing properties undersold? There are a number of reasons.

One reason is that home sellers have been waiting for the market to improve for years. Every 6 months or so they will call a local agent asking, “How is the market going?” They are provided with an appraisal and often the comment is “I won’t be selling until I can get ‘X’ price”.

All of a sudden, properties values have risen to ‘X’ price, and they go on the market because the price is so good & they can’t believe that prices have risen so much. The problem is that the market is still moving and they end up underselling their property by tens of thousands of dollars.

Here are a couple of examples.

Yesterday I saw a modern duplex come on the market in Bellmere for $540,000. The configuration was 3 bedrooms on one side and 2 bedrooms on the other. It was also located in a quiet cul-de-sac on over 700m² and just 7 years old with a potential return of $670pw. This property is easily worth $600,000…maybe a little more! The $540,000 price tag would have been a good price in January or February, but it is now July and prices have improved significantly.

Another home I saw come on the market this week, a lovely 4 bedroom home with ensuite and double garage in a nice neighbourhood on a 600m² allotment. The price was $399,000. Again, this was an excellent price in January or February when homes were previously selling in the $350,000 range however in this rising market this type of property now sells for $450,000-$500,000 and is in strong demand.

With the seller not realising how good the market is, and an agent that doesn’t have a handle on pricing the seller ends up underselling the property and is none the wiser, until it’s too late. This is an enormous amount of money for a family to lose and there is no way to recover it because once it’s sold – it’s sold!

So, the message is that if you are selling or thinking of selling you need to know what is selling in your neighbourhood and for how much. How do recent sales compare to your property and most importantly, what is the current trend of the market? The reality is that any agent can get a good price at the moment but not every agent can get you the highest price the market is willing to pay. This takes experience and strategy.

If you or your agent is still comparing to the first quarter of the year you will end up like these two examples and lose tens of thousands of dollars.

My message to home sellers is clear…it will cost you nothing to get a second opinion before you place your biggest asset on the market. Remember, once it’s sold, it’s sold and you don’t get a do over!

Article by Frank Pike

Frank Pike has been involved in real estate since 1987 and has now been the business owner and Principal of Marsellos Pike Real Estate for over 27 years. He has been involved in over 5,000 sales in his career and oversees the management of a rental portfolio upward of 800 properties.