More often than not, property owners entrust estate agents with the task of determining how much their property is worth. If you have found yourself in this situation, they you will be surprised to learn that estate agents are actually not mandated to undertake property valuations even though they do.
Thus, estate agents only offer informal opinion concerning how much your property may be worth. This means that you should not take their opinion blindly as the chances of being taken advantage of are high. Here is how;
- Agents will undervalue your property so as to sell it quickly. This means that they will be able to collect commissions faster at the expense of your investment as you will definitely have to run into losses.
- Agents may also overvalue your property as a way of winning new business. Generally, potential vendors seem to be attracted by agents that flatter them with an inflated price for their property. The problem with this approach is that when you get into a contractual relationship with them then you may end up reducing the price if your property has to attract some serious buyers. Consequently, since a majority of serious buyers would have been alienated by the false start, then you may end up selling the property for less than its worth.
- Agents undervalue your property for their own personal profit. People who trade in property may in some instances offer estate agents bribes to enable them get property at highly subsidized prices hence the need to tread carefully when dealing with valuation.
The Truth about the worth of your Property
Now that you are aware of the possibility of being taken advantage of by estate agents how then do you tell the real worth of your property? Before delving into how much your property is worth, it is important to rid yourself of the common misconceptions associated with the true worth of property. That is, it is commonly believed that:
- The worth of your property is proportionate to the amount of money you have spent on it over the years
- Your property is worth the money you have paid for it
- Your property’s worth is equivalent to the amount you would like to sell it for.
All these statements are far from the truth hence should not be trusted. Instead, it is safer to say that the value of your property is equivalent to what buyers are willing to pay for as long as it is a fair price. Generally, the buyer should determine the price they are willing to pay for property based on a comparison of the price of similar property that is being advertised at the same time as yours and the price of similar property as yours that was recently sold. That is, before the property is sold, there is no guarantee to what price you will sell it. Thus, the best you can do is ensure that you make proper use of the information that is at your disposal to be able to come up with a realistic price for your property and be able to make the most of your investment either as a buyer or a seller.