Pitfalls in valuing properties for sale

With all the information available on past sales and for sale properties, this sounds easy. We now have agents with no area experience offering valuations and even have banks spruiking online valuations, but BEWARE!. Basing valuations on this raw data alone, eg, no of bedrooms, bathrooms, living rooms, block size, etc is only the basic beginning of valuing a home.


These valuations make little allowance for property ambience, room sizes & layout, style, quality of finish, fittings or landscaping, interior light, etc, etc, etc.

A client reports taking advantage of an NAB offer & received an 11 page report chock full of sales history for the suburb covering 218 sales from $2.3 m to $210,000 and included the property on market history in excess of $1m. It happens to have 7 bedrooms, 5 bathrooms on 1,126 sm block & NAB said “Probable Value Range - $415,000 to $475,000”. Now this is an extreme example, but illustrates the point.

Auctions invariably in this area and in this market gives only a skewed view of buyer price feedback as there is very limited acceptance of the process. This means the bulk of bidders are those seeking a bargain, cashed up to drive prices down and seeking a distressed sale, egged on of course by very price aggressive marketing by the agencies. You only need to look at some of the price outcomes to be convince dof this.

The only way you will receive an accurate valuation is to talk to your area expert agent who will know the ins & outs of all comparable sales, which one had termites, which ones were financially distressed sales, those that were a wreck internally, etc. He/she will know this from having been in many of the properties, assessed all the photos online as part of ongoing competitive market analysis, spoken with buyers in the area who have been through open homes – this process is very time consuming but builds up a huge body of relevant knowledge – those agents who go everywhere cannot hope to offer such knowledge and rely on commission discounting or some sort of gimmick that does nothing to sell your home.

Let us not forget the dining room

Rarely today do we find a formal dining room, the eating area has become assimilated as part of the open plan living combination of dining, kitchen & lounge room.


If we have two separate areas, it is the lounge or a games/media roomThe formal, standoffish dining space has become very casual, comfortable & adjacent to the kitchen to meet today's relaxed approach

This often means reducing the dining area to table & chairs plonked in a space with no presence or style.

To create the right atmosphere, try to create a room within a room to draw people to the defined space.

Try introducing a nice soft rug underneath the dining table to help liven up the space, add paintings or a mirror on a blank wall, perhaps paint it a feature colour.

A small bureau adds storage &interest with a lamp & display items.

A low hanging pendant will generate a more formal atmosphere.

When entertaining, use of candles as a centre piece &/or a formal vase arrangement will add dramatic effect.

Decorating with mirrors

Mirrors should not be prisoners of the bathroom. Yes they are necessary and vital for any bathroom, but what about using mirrors in other parts of the house?

 A mirror is the perfect substitute for a canvas. If you do not want to base your room around artwork, or feel as if more colour would be disastrous, a mirror is a fantastic addition to a blank wall in any living room, bedroom or corridor.

The benefits? It opens up the room making any sized area feel and look larger. An important feature for a small room, a mirror can make the room feel less cramped and lighten up the area.
Even in a large room this will illuminate the space – you will feel as if the room goes on forever.

                                    
 Maintain the colour scheme by framing the mirror in a texture and shade that compliments the rest of the room. A mirror works best when it sits above something like a cabinet or bed. It anchors the mirror to a defined space and centres the room better.

Think Local - Coolum property now in undersupply

Michael Matusik recently analysed the Australian housing market and determined that for detached housing, the 12 months to August 20012, the number on the market increased by 3%. This would seem to indicate a continuation of a buyer`s market.


However, the picture varies considerably by state and region as the attached newsletter highlights, and in all this it clearly shows Post Code 4573 Coolum as having the 3rd biggest drop and being now in an undersupply situation despite the Sunshine Coast as a whole being tagged as in oversupply. So much for the value of a national, or even regional, analysis being meaningful!

All this confirms my earlier advices from analysis of my farming territory of some 2,000 properties that Coolum is now a “hot spot” in a balanced market – well presented and properties well priced and marketed by the local expert are selling very quickly as the example in my newsletter of 66 Lagoda Drive, a magnificently presented property selling within 5 days for list price illustrates. (Note – tip for interior decorating in a following post shows how mirrors can be used to open up all rooms in the house – presentation is so critical today in marketing)

For further detail on Mount Coolum activity, my website at www.geoffgrover.com.au details all my recent sales and current listings. Keep an eye on this site for coming sales and new listings – several are about to hit websites.

In detail, Matusik found an:
* undersupply of detached houses for sale in Sydney(2%), regional NT (2%), Darwin(3%) and Perth(3%).

* Detached housing markets at equilibrium are: Adelaide(4%),Brisbane(4%),Melbourne(4%),Hobart(5%) and regional NSW (6%).

* Oversupplied detached housing markets are regional WA (especially the Margaret River area) (14%), regional Victoria (9%), regional Qld (including the Gold and Sunshine Coasts and Cairns) (8%), regional SA (7%) and the rest of Tassie 7%

But where are the stand-out post codes? And where are the shockers – the spots where housing supply has increased, and sometimes by lots?

The table shows the Top Ten Winners and Losers

Again highlighting the dangers of taking too broad a view, whilst Melbourne as a whole is regarded as being in equilibrium, 7 of the top ten postcodes revealing increases in stock are outer Melbourne suburbs, although paradoxically 2 of the top ten postcode stock drops were also outer Melbourne suburbs, namely Werribee South and Wyndham Vale Portland, the very busy port in Victoria, had by far the biggest drop.

Source – Matusik Missive September 25th and September 26th, post code table from SQM Research.
For further detail on Mount Coolum activity, my website at www.geoffgrover.com.au details all my recent sales and current listings. Keep an eye on this site for coming sales and new listings – several are about to hit websites.