Assessing Property Value: Questions for Real Estate Agents
When assessing the value of a property, asking the right questions of a real estate agent is important. You may only have several minutes on the phone during an initial call or at a 30-minute open house inspection, particularly when there are lots of interested parties. Here are some relevant questions to ask to help estimate what the real property value is.
What are the recent selling prices of homes in the surrounding area?
Not all sold prices of properties are published online, so it is important to ask the agent about property valuations in the local area you’re interested in buying a home in. This intelligence will assist in the evaluation of the local housing market and give you insight into recent sales.
What kind of major renovations have been made?
Asking when the property was built, what the original structure was and if any major renovations have been made will help you determine the property value. Ask the agent if there are any easements over the property, council restrictions or issues they know of such as mould, rising damp or water damage stains on walls and ceilings. While you can make an offer prior to auction subject to a building and pest inspection, this is not possible at an auction – so ask the agent about any lurking issues they know of. In some circumstances, the vendor may have arranged building and pest inspections before they listed so be sure to ask the agent.
Why are the vendors selling?
Asking the agent questions such as “what is the reason for the sale?”, “have they been happy here?” and “how long have they lived here for?” may help you appraise the property value. The answers to these questions will not only inform your thinking, but they will also give you some leverage when it comes to negotiating a price as you know more about the specifics of the vendor’s position.
Ask the Neighbours!
You can also knock on doors or houses surrounding the property you are looking at. Be polite to the neighbours who answer the door and you’ll be surprised how helpful they can be answering questions that even the agent may not be able too!
How many contracts have been requested?
To know your ranking amongst the competition, you should try to understand how many other buyers are also seriously considering the property. Ask questions such as “are there any contracts currently out and if so how many?” or “have any offers already been made on the property?”. Knowing how many buyers are interested helps you to understand the competition you are up against and also how competitively priced the property is, considering the interest. This kind of detail is what gives you the edge when it comes to negotiating.
Is the Vendor Open to Pre-Auction Bids?
Depending on the circumstances of the sale, you can also enquire about other negotiation options. If the property is going to auction, discuss if any other buyers have made pre-auction offers and assess if there is an opportunity for you do so also. Just because a property is advertised for auction does not mean that the vendors would not be interested in pre-auction opportunities. Remember, knowledge is power so the more you know the better placed you are to be the successful buyer.
Forming a good relationship with real estate agents can be extremely useful when negotiating to buy a property. If the agent knows you are asking intelligent questions, they will respond by providing additional information to help you estimate the property value and the vendor’s ultimate position on price.