Come selling time, everyone wants the best price for their property.
However, new research suggests that sellers’ price expectations can be out of line with the current state of the property market.
The findings come from a survey commissioned by real estate auction livestreaming platform Gavl in conjunction with data and insights company Pureprofile.
It gauged the price expectations of 1001 Australians who were in the market to buy or sell property.
A separate survey was conducted by Gavl to compare these findings with those of real estate agents.
According to the surveys, 92 per cent of agents think vendors have unrealistic sales price expectations; 78 per cent of home-owners believe their price expectations are realistic; and 55 per cent of agents said vendors’ sale expectations typically are above market price expectations by $50,000 or more.
A further 36 per cent of vendors generally had expectations up to $50,000 above the market price.
When consumers were asked whether they would adjust their price guide based on agent feedback on market expectations, 52 per cent said they would adjust it only slightly.
However, Belle Property Wollongong principal Darren Kay said having been an agent and a vendor, “we all tend to think our homes are better than anybody else’s because we’ve lived there and our kids have grown up there”.
“Real estate, it’s an emotional purchase,” he said.
“There’s no science to it. There’s comparable sales, but it’s not like commercial or industrial real estate… There are properties that sell up the road that are inferior to properties down the road but sell for more.”
Mr Kay said an agent’s role was really to educate the vendors as to where they think market value is, by providing comparable and relevant sales in their area.
“I wouldn’t say 92 per cent of vendors have unrealistic expectations, because they don’t,” he said.
“In terms of the auction clearance rates, one would suggest that whatever the auction clearance rate is at the time… It wouldn’t be unreasonable to suggest that if auctions are clearing 50 per cent, then 50 per cent of vendors are in line and are realistic.
“The other 50 per cent, are they unrealistic? Not necessarily, it may just be that the right person hasn’t come along in that time.”
Mr Kay said their agency typically needed 15 to 20 inspections to properly ascertain market value.
“The challenge when the market changes, is that vendors’ expectations are probably still six months old,” he said.
“There’s probably more of an educational/conditioning period of six to 12 months to turn that around, and then bring vendors back in line with the marketplace itself.”
MMJ Real Estate Wollongong director Daniel Hastings, who works as both an agent and auctioneer, recently told the Mercurythat there were still plenty of vendors that likely have the misconception that the region’s market “is still going gang-busters like it was for the previous few years”.
Mr Hastings said choosing the appropriate method of sale and making sure vendors’ price expectations are “correct and adjusted accordingly” were vital.
“In our case, we’re probably not auctioning as readily,” he said.
“We’re probably qualifying properties a little more to see if it should be an auction candidate.”
Gavl spokesperson and auctioneer Justin Nickerson said while the data reveals that there are agents who don’t have trouble managing sales price expectations, “I haven’t met one who said this wasn’t a challenge”.
“These differences will always be a factor for agents and vendors to work through, but there are ways for agents to manage vendor expectations such as presenting recent sales of similar properties in their area,” he said.