Do you know the value of your home?
Most Real Estate companies offer a Comparative Market Appraisal (CMA) to their clients. The standard and calibre of these CMA’s vary wildly. I have seen one page “guestimates” on one hand and professionally presented bound documents running up to 20 pages plus, on the other!
Usually the one page “guestimates” are a product of lack of knowledge from the Salesperson and quite often do not contain the research and expertise necessary to satisfy the basic legal requirements.
Under the Real Estate agents Act (Professional Conduct & Client Care) Rules of 2009 the standard required is spelt out clearly in Rule 9.5.
The key points in the Rule are threefold;
1) The appraisal must be in writing
2) The appraisal must realistically reflect the current market conditions
3) The appraisal must be supported by comparable information on sales of similar land in similar locations
To give a realistic Property Appraisal the agent is required to do considerable research. This research is usually a combination of viewing statistics of property sales, analysing these facts, checking with Valuers and other Realtors, identifying the closest comparable property to the subject property, and gaining knowledge of the subject property. The ability and expertise of the agent can have a major impact on the quality of the appraisal.
Does the Agent have good local knowledge?
Does the Agent have education and knowledge in the valuation process?
Does the Agent have training in;
1) Valuation procedures?
2) Data sources and availability?
3) The Resource Management Act?
4) The GST Act?
The agents expertise or lack of it, will usually reflect in the calibre (and therefor the reliability) of the appraisal.
When comparing CMA’s it is vital that the quality of the information is sound. Do not be seduced by CMA’s that offer scanty research and promise amazing sale prices – they are usually too good to be true!
Remember that the law demands a realistic reflection of the market.
Knowing the value of your home is the first step to financial freedom. Make sure you ask for a comprehensive, realistic and well researched Property Appraisal for your property.
Grad Dip Bus Stud
Principal – goodGround Real Estate Ltd