Confusion over how to research market value

[miss_m]

Hi All,

I'm a newbie to this forum and to the buying process

We have been looking at properties in the inner west (sydney) as a PPOR.
We've got our eye on a 2 bedroom house which is up for auction in a few weeks.

We haven't contacted the agent or gone to see the property but I want to get an idea of the market value of this house.

onthehouse.com.au gives the sales price of past sales BUT there is no information about the number of bedrooms etc so I don't know if I'm comparing like with like.

What else should I be looking out for (eg: under flight path?) and how would I access this information. I'm happy to pay for sales reports but want to make sure I know what to look for.

This forum is fantastic but I think I've got a case of information overload

Thanks for your input

 

[Propertunity]

onthehouse.com.au gives the sales price of past sales BUT there is no information about the number of bedrooms etc so I don't know if I'm comparing like with like.

Yes, what you are looking for is a CMA - Comparative Market Analysis. I see in onthehouse it isn't available yet as it is greyed out and "Coming Soon".
So in the meanwhile you'll need to buy a CMA from either Residex, RPData or PDS Live. Or smile nicely at someone with access who will do a freebie for you (If you want to send me a PM, I'll run one up for you )

One word of advice though. Areas of Sydney, and the Inner West is one of them, are in a rising market. You would have noticed this too I'm sure. You nearly get trampled at the Open for Inspections The price figures on a CMA are derived by recent sales (and these are often 2 - 3 months out-of-date by the time they are reported). I've noticed actual sales prices achieved are almost always higher than the figure on a CMA by at least 5%.

What else should I be looking out for (eg: under flight path?) and how would I access this information.

Most of the Inner West is affected by aircraft noise - so no real point looking out for this.

I'm happy to pay for sales reports but want to make sure I know what to look for.

What you really need to do in a CMA are comparable sales. Critical information is BRM, BATH, CAR. After that it is a bit of a manual user intervention to remove non-comparable sales that the software has 'found'.

 

[Rolf Latham]

Hi Prop

In general, someone needs to tell the valuers.

Looooooooooooove to value ahead of the market when its soft and boggy, but when it hums and sings like it does at the moment, we are finding valuers (some, who are predictabled whim I wont name) are seeking out the bottom of the quartile pile of stale sales to justify their PI cover.

We are getting valuers comparing houses on normal resi streets being classed as inferior as the same 4 x2 house on same land size backing onto the Oribtal M7...................all in the name of "being right". Supose being on the M7 acoustic fence means we are close to transport.

ta
rolf

 

[Joe C]

You can check out how close the house you're looking at is to a flight path:

http://maps.google.com.au/maps/ms?msa=0&msid=105686047848531438589.00046881acd1e03708602

The flight paths on that map are not 100% accurate, I also understand that they may change slightly depending on weather conditions.

As Propertyunity pointed out, most of the inner-west is affected by plane noise, but it does get louder as you move further south.

 

[miss_m]

Thanks all, that was very helpful
I now feel I know some fo what to look for - it's a start
Propertunity, thanks for your adivice and offer to do a check for me.
I'll send you a PM with the details
Joe C, I did a search and the street we're looking at is not "directly" under the flight path but I'm sure it'll nonetheless be noisy

Thanks again

 

[Propertunity]

Hi Prop
In general, someone needs to tell the valuers.
We are getting valuers comparing houses on normal resi streets being classed as inferior as the same 4 x2 house on same land size backing onto the Oribtal M7...................all in the name of "being right".

Rolf, I seem to be spending hours and hours putting together comparable sales for valuers that have undervalued. Often this means calling agents for the results of last week-end's auctions and looking at RPData exchanges that are not yet settled to come up with real comparable sales.

One guy in particular that does stuff for CBA is a 'serial offender' regularly coming in under 10% of selling price - a real PITA.

 

[Rolf Latham]

quite possibly the same serial folk that I have the same challenge with on all of the east coast .................M&H ? .

10 % + or - around

Problem is they just dont give a hoot that their lack of homework results in downstream issues that affect dozens of people per transaction

ta
rolf

 

[RightValue]

Valuers walk into the future looking backward.

In a rising market, especially when it starts to take off it is hard to keep up, especially when agents don't report current sales.

Good agents turn up to meet the valuer with current sales evidence of other properties their company has sold .. this really helps.

A couple of months ago I turned up at a property, which I thought was oversold. THe agency had sent the handyman to let me in. I asked if he had any recent sales evidence.. he didn't.

I came in under sale price as a result of no supporting sales evidence.

A week later the selling agent rings me up because the deal fell over.

This was a Jenman agency that had apparently achieved prices above what some of the other agencies had recently achieved.

I explained to him I had no new supporting sales evidence. He told me his agency had sold several properties in the 2 weeks proir to my valuation that would support it .. they do not report their sales to PDOL.

I told him that if he had turned up and given me that evidence I would have been able to consider it. He realised the error of his ways in sending the handyman when it was clear to him that the market had recently moved up quite a bit. .... I did suggest that they also reoprt their sales.

I always try to use the most up to date sales, but if they are not there on the database I can't use them. Don't expect me to put my certification and livelihood on the line because someone is paying top dollar and borrowing the max if there is not any evidence on which to rely on in court.

A valuers perspective.

cheers

RightValue

 

[Rolf Latham]

Hi RV

Im the first to jump to a valuers defence............its an inexaxacting art form without a doubt, and in general valuers can only work with what they have available.

What gets my goat is the obvious position that some valuers take when being asked to do a "double take" on comps that clearly arent. Black is black regardless of how much someone wants to make it white.

My best valuer story..............a valuer bringing an auction valuation in 10 % below the price achieved on the day because " the agent said this was a really good turnout and an unexpected price".

Thats logic that you simply cant argue with. So much for an efficient market.

ta
rolf

 

[Propertunity]

Im the first to jump to a valuers defence............its an inexaxacting art form without a doubt, and in general valuers can only work with what they have available.

Likewise for me too

We purchased recently for a client @ $480K.
Val came in at $45K under.
I spent 4 hours of my life that I'll never get back getting 6 comparables - all same suburb, all with 6 weeks or younger sales dates, all comparable for land size & house, 3 were just over $480K, 3 just under.
Bank / valuer don't want to know.

 

[mja]

My advice - if you find a valuer that's good - hold onto them for dear life. Makes it hard when moving banks (different panel of lenders) or if they don't do a certain area though.

 

[Rolf Latham]

were they grey ?



ta
rolf

 

[mja]

Likewise for me too

We purchased recently for a client @ $480K.
Val came in at $45K under.
I spent 4 hours of my life that I'll never get back getting 6 comparables - all same suburb, all with 6 weeks or younger sales dates, all comparable for land size & house, 3 were just over $480K, 3 just under.
Bank / valuer don't want to know.

You should be able to escalate this. I wonder if anyone has complained to the boss/ceo of the valuers and had a decision reversed?

 

[mja]

were they grey ?



ta
rolf

Only because I was holding onto them for dear life.

 

[RightValue]

Likewise for me too

We purchased recently for a client @ $480K.
Val came in at $45K under.
I spent 4 hours of my life that I'll never get back getting 6 comparables - all same suburb, all with 6 weeks or younger sales dates, all comparable for land size & house, 3 were just over $480K, 3 just under.
Bank / valuer don't want to know.

That is not good at all.

Few lenders or MI's will nowadays let a valuer chage figures without a good reason/new evidence.

I myself would be happy to admit that this was new unreported evidence and say that the market has recently moved and the sale price is supported by sufficent new sales evidence that I considered comparable .. if indeed it was comparable.

With 6 sales like that I would certianly drive by them before saying yes or no.

Like I mentioned before .. it is best to give this sort of evidence to the valuer BEFORE they complete their valuation. In your case Propertunity the agent didn't help you by not providing additional evidence for the valuer.

If I am at a sale that I think is oversold I will often tell the agent that and tell them that they need to give me eivdence to support the sale. .. Amazingly few can do that .. the experienced long term agents are another matter., they reel off the sales.

The fact is that in a moving market Valuers are usually behind the market. The even sorrier fact is that if it is a sale at a new level the valuer will often crash the first deal as there is no supporting evidence but when they are valuing the next one then the previous sale they have come in under gets used as a comparable sale ...

Valuers cannot put figures on property based on sentiment .. they need hard evidence of other sales to support the sale price.

cheers

RightValue