A Sad Tale about Property Value

One of my industry colleagues recently told me this story…

A homeowner invited the agent in to appraise their house, in preparation for selling it

The agent provided an appraisal, indicating a likely sale price of around $325,000 to $340,000.

The owner however, was adamant that her house was worth at least $375,000. The agent revisited the appraisal, confirmed her sale price estimate and suggested getting a valuation. The homeowner declined, and listed the property with another agent – at $375,000.

After months of unsuccessful marketing, when the 2nd agent’s listing had expired, the homeowner had the property valued by a licensed valuer. The valuation figure was $327,000.

The homeowner then contacted the first agent, saying:

I should have listened to you in the first place. Please will you now list my property at around the valuation figure?

Shortly thereafter, to the owner’s relief, the (first) agent sold the property – for $326,000.

The lessons?

  • Even though actual sale prices are trending downward in many areas, many owners still think their property is worth what it was a year ago. In almost all cases, they are mistaken.
  • Many homeowners are under the impression that their property is (“has to be“) worth at least as much and perhaps more than the price a neighbour sold their house for. Again, in many cases, they are mistaken.
  • Not heeding the professional input from a good local agent can result in lost time and money, not to mention disappointment and frustration.
  • This one’s for agents as well – doing it properly and with integrity will pay off in the longer term, even if the immediate outcome is disappointing
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