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2 Reasons Why Property List Prices Are Wrong

2 reasons property list prices wrong

2 Reasons Why Property List Prices Are Wrong

There is the home with an advertised list price. You set your heart on it. You even add a little bit extra to allow for the property market fever pitch. But then you miss out. You are heartbroken. You have to start all over again.

You ask yourself why is there a gap between advertised list prices and what properties really sell for?

There are two simple reasons why real estate list prices are wrong:

  1. The property market is unpredictable
  2. List price estimates are inaccurate

Here is why property list prices are wrong:

1. The property market is unpredictable

There are times when a property is highly coveted by multiple buyers.  This demand can result in a sale price significantly higher than the list price.

For example, a list price estimate may be accurate for regular home buyers, but in the eyes of a property developer the land value could see the price paid well above the nominal value.

A property may hold a unique appeal for one or more buyers which is not obvious to the broader market. For example, the neighbour seeking to acquire an adjoining property to their own residence. The neighbour may pay over the odds for increased control of their estate.

2. List price estimates are inaccurate

Those responsible with selling real estate should have a good understanding of their local market. However, inexperience with the property market can lead to inaccurate list price estimates.

Conversely intentional inaccurate list price estimates that are well below the expected selling price are misleading and deceptive.  This type of behaviour is known as underquoting and is illegal.

If a real estate seller has a history of selling properties at prices much higher than what was advertised, then buyers should ask why this is the case.

Do your own research using independent property price predictions.

 

Here are the top 10 most inaccurate suburbs for list prices:

NSW Suburb Sold Price vs List Price
1 Cremorne 18.3%
2 Eastwood 17.6%
3 Leichhardt 17.1%
4 Marsfield 16.8%
5 Epping 15.8%
6 Rozelle 14.8%
7 Lane Cove 14.8%
8 Annandale 14.1%
9 Rosebery 13.9%
10 Blacktown 13.9%
Source: REALas.com March 2017

 

VIC Suburb Sold Price vs List Price
1 Bulleen 19.7%
2 Delahey 18.6%
3 Murrumbeena 18.1%
4 Forest Hill 18.0%
5 Frankston 18.0%
6 Glen Huntly 17.8%
7 Hampton East 17.4%
8 Sunbury 17.4%
9 Westmeadows 17.3%
10 Oak Park 16.6%
Source: REALas.com March 2017

 

With respect to the survey:

  • it is for auctions in March 2017
  • from Victoria and New South Wales
  • only suburbs with 4 or more publicly available quotes and auction results were included
  • the “Sold Price vs List Price” is the average percentage difference between the sold price and the public list price

 

REALas accurately predicts property values

REALas property values are 5% from home sale prices on average – Australia wide including auctions and private sales.  Almost 9 out of 10 of REALas home price guides are just 10% from the final home selling price.

There are thousands of homes on REALas.com

We help home buyers research the right price to pay for a home.

realAs real estate property valuation home price guide report

 

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2 Reasons Why Property List Prices Are Wrong
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  • Carmela Correale

    In what way do you help the home buyer? We are looking to sell and buy in a less expensive area so that we may have some money left over.

    Reply
    • We help home buyers by providing accurate predictions of what properties are likely to sell for. Good luck with your search for your next home.

      Reply

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