The 8 Step Guide to pre-appraisals that always end in listings sold!

appraisals that list & sell listing presentation Oct 06, 2020

The pre-appraisal separates the best from the rest.

Below you will find the best step-by-step guide to help you prepare for your appraisal. This guide will ensure you rock up to your appraisal presentation as a local property market expert with all the energy and poise of a leading local real estate agent.

Have you ever heard the phrase “Proper Planning Prevents Poor Performance”?

This is also known as the “5 P's of success”.

It promotes the importance of planning for a successful outcome.

In my opinion, when it comes to appraisals in real estate, this phrase is of utmost importance.

The planning you do ahead of the appraisal presentation will not only determine whether or not you will get the listing, but it will also help you to decide whether or not the listing is right for you, that is if the listing is aligned with your personal and professional goals. 

Proper planning will go a long way to ensuring you list the property

  • On your terms
  • With an appropriate commission agreed
  • With paid property marketing in advance

That’s a big statement, huh?

No, not really!

Proper planning before an appraisal presentation positions you as an informed local property market expert, someone who knows exactly what they are talking about, as a local real estate agent who can get the job done and has the evidence to prove it.

This energy and attitude, when presented to your potential seller, helps them to buy into the fact that you are a safe place to do business. It helps them to feel like they can trust you to help them reach their needs and goals.

Turning up to an appraisal unprepared is unprofessional at best and arrogant at worst!

So, in today’s world, what does it look like to have properly planned for an appraisal appointment?

Follow these steps:

Step 1: In the initial call or invite from the property owner

  • Keep the conversation brief, have good manners, and express your gratitude for the opportunity to appraise their property.
  • Never become so big for your boots in sales that you can’t say thank you for the opportunity. Sales is the type of business where there will always be another upcoming star nipping at your heels.
  • Good manners are a sign of class and are always noticed and appreciated.
  • Do you know what else is always noticed? Arrogance! Nobody finds arrogance endearing.
  • Choose wisely the energy you wish to display to the people who, ultimately, pay your bills.

Ok, so moving on.

  •  In this conversation, you want to ask several clarifying questions, such as the property size, number of bedrooms, bathrooms, garage, etc.
  • Ask why they would like to have the property appraised. At this stage I would not ask why they are considering selling; this question is far more powerful at another point in the appraisal process. (I talk more about these type of questions in my course 'Appraisals that LIST & SELL Successfully’ - you can find more out about these questions - here)
  • A softer ask of this question is “Why are you choosing to have the property appraised?”
  • Agree with a time that is suitable to you both. Remember that, at a minimum, you need 24 hours!! You have quite a bit of work to do before this meeting. As you become busier with appraisals and listings– this may push out to 48 hours.
  • Finish the call by telling them you’re looking forward to chatting with them more in person.

Now your work begins:

Step 2:

  • First and foremost; we research the property and its history.
    • Build size, land size, how many bedrooms, how many bathrooms, garage, etc.
    • We want to know when the current owners bought it and how much they paid for it.
    • Did they overpay for it?
    • Is the market better or worse now than when they bought it?
    • We want to look at any pictures that are online for that property, either on the property portals or from the last time it was on the market.
    • How? Through our property portal tools.  I use core logic and the member’s area of REIWA
    • We want to know the facts about the property
    • What we are doing is filling in the blanks for ourselves - the blanks in our knowledge of the FACTS of the property.

Step 3

Step 3 is a crucial element to the success of your ultimate appraisal presentation. It is astonishing to me how many reps skip this step – so to reiterate - I mean CRUCIAL!

  • Put down your tools and get in the car!
  • You are going to physically drive by that property and have a really good look at it
    • You’re going to look at the neighbouring properties.
    • The property’s location on the street.
    • The location of that street in the suburb.
    • The presentation of the street.
    • You’re going to look at the property’s proximity to the local school, public transport, amenities & road network, you’re just going to take it all in!

I have sold hundreds of properties and I still do this for every appraisal, it is a key part of my daily activities in my marketplace.

Step 4

Back to the office and now we start putting the puzzle pieces together so we can present to the property owner, as a local property market expert and a leading local agent. Even if we haven’t reached this status quite yet, that’s ok, we will work every day and on every appraisal to get there.

These steps that I am laying out for you will not only help you to portray the energy of a local property market expert and leading local real estate agent to your potential seller, but they will also help your potential seller buy into this energy too.

So back to putting the puzzle pieces together for your presentation; 

  • It’s likely at this stage that you already have a rough idea of a possible sale price for the property.
  • How you present this information is where the magic happens.
  • These are the puzzle pieces you want to find, using the software mentioned above, or a similar program for your specific country.
    • Run a report to see how many properties in total have been sold in the entire suburb in the last 12 months (all property market software will have this report).

A quick note here: If you’re not familiar with the suburb, or you’re only learning your marketplace, print this report out!

  • The report should include the following for every property sold in a 12 month period:
    • A photo of the property
    • The property address
    • The property size and type
    • The sale price achieved
    • The date of sale
    • The number of days on the market
  • Look at each property, its address, how much it sold for and how many days it was on the market

Step 5:

Next, you want to look at how many properties, in the exact same bracket as the property you are appraising, sold. For example, if you are appraising a townhouse - how many townhouses sold, if you are appraising a 3-bedroom villa – how many villas sold.

  • Look at the bracket you are appraising in comparison to the overall sales in the suburb
  • Consider the following;
    • Is the property you are appraising a normal sale for the suburb?
    • Is this bracket a smaller group of the market or a larger section of the market?
    • Have a look at the average length of days on the market for every sale in the suburb. By doing this you should find a trend in the market - i.e. most properties sell in 4 weeks, 6 weeks, etc. There are always exceptions to this rule, such as a particular property is a hot property, or another property was so overpriced it spent months on the market before a price adjustment finally got the deal done. However, reverting to days on the market, you should see a clear trend for the overall marketplace of that suburb.
    • Next, have a look at what segment of the market your property appraisal is sitting in. How does this segment of the market’s ‘days on market’ perform in comparison to the overall market? Similar, or wildly different?

 

So what you are doing here is availing of all the information that, when shared with the current homeowner, enforces their belief in you as a local property market expert!

The information you now have is

  • How many sales have been in the suburb in the last 12 months
  • How many of those sales where similar to the property you are appraising
  • What the average sale price in the suburb is
  • What the average sale price of the property you are appraising is
  • ***Plus, you have evidence to back up these claims
  • You also know how the property presents on the exterior
  • How it is impacted by the neighbouring properties
  • What the location of the property in the suburb offers to the local buying market.

Step 6

Next, we move on to informing ourselves, FULLY, of the prices achieved for each property in the segment of the market which your property appraisal fits into.

  • Take your list of property sales that are similar to your appraisal property
  • Go make yourself a cup of coffee and settle into 30-60 minutes of online research, this is easy and informative work.
  • At this stage you already know what the exterior of your property looks like, you may also have an idea of the interior from viewing any photos linked to the property online.
  • What you’re going to do next is take an in-depth look at every other similar property sale within the last 12 months.
  • This is easily done as all properties are advertised online.
  • Hop onto Google and type - FOR SALE and the property address - magic!
  • On viewing the online advertising for the property
    • Look through each of the photos
    • Look at how the property was presented
    • Read the property marketing
    • Each property should take you a maximum of 5 minutes to look over

 

  • Create a table in Microsoft Word with the following columns and gather the information simply by copy and pasting;
    • Property address
    • Type & build size (for example: 3x2x2 160sqm)
    • Price achieved
    • Sold when & number of days on the market
    • Link to the online advertising for the property.

 

Your local property market expert status is going from a zero to 100 real quick! Cue DRAKE!

  • The information you now have is
    • The number of sales that have taken place in the area in the last 12 months
    • The number of those sales that were similar to the property you are appraising
    • The average sale price in the suburb
    • The average sale price of the property type you are appraising
    • ***Plus you have evidence to back up these claims
    • You also know, how the property presents on the exterior
    • How it is impacted by the neighbouring properties
    • What the location of the property offers to the local buying market.
    • You now have seen every other similar property that has sold in the last 12 months, what it looked like interior and exterior, the price it achieved, and how long it took to sell!

STEP 7

Next, you’re going to look at WHAT’S for SALE and WHAT’S COMPETING with the property you are appraising should your property owner go to market.

A word to the wise here - the only sale price evidence your property owner has, is the evidence of the ‘FOR SALE’ sale prices in the local marketplace. In general, they don’t have access to the sold prices.

All real estate agents know, in today’s market, the FOR SALE price is the aspirational price.

It is what people are hoping to achieve. The price advertised for sale can be governed by many things, the worst of which is the agent or homeowner, who, without a clue of the market value, advertises the property at an inflated price which is just not achievable.

This means you, as a real estate agent, need to be VERY cautious when looking at the FOR SALE evidence. However, you do need to be informed on it, as this is what your property appraisal owner is seeing

  • When you are considering the FOR SALE evidence; you are looking for current stock on the market that is in direct competition with your potential listing
  • Apply the same actions as to when you were researching the SOLD stock. Go to Google and type ‘FOR SALE’ and the property address. Look at the marketing for these properties in detail.
  • Create a table in Microsoft Word with the following columns
    • Property address
    • Type & build size (for example: 3x2x2 160sqm)
    • ADVERTISED SALE PRICE
    • Length of time the property has been on the market
    • Link to the online advertising for the property

 

IMPORTANT NOTE: I always allow time to drive by and view the competing property’s exterior, location, and neighbouring properties before giving my appraisal presentation.

 

  • The information you now have is
    • The number of sales that have taken place in the area in the last 12 months
    • The number of those sales that were similar to the property you are appraising
    • The average sale price in the suburb
    • The average sale price of the property type you are appraising
    • ***Plus, you have evidence to back up these claims
    • You also know how the property presents on the exterior
    • How it is impacted by the neighbouring properties
    • What the location of the property offers to the local buying market.
    • You now have seen every other similar property that has sold in the last 12 months, what it looked like interior and exterior, the price it achieved, and how long it took to sell!
    • You know exactly what properties are in genuine competition with the property you are appraising should you go to market
    • You also know, what properties are sitting overpriced on the market and how long they have been sitting there

Now, my friend, that is the information any local property market expert and leading local agent would know off the top of their tongue.

Keep in mind the more you do this, the more and more this information will become like knowing your alphabet

STEP 8

Next, let’s prepare your pre-appraisal pack. The pre-appraisal pack that wins every time in today’s digital market! 

 

 


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