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Real Estate Rule of Thumb is a Myth

real estate rule thumb myth

Real Estate Rule of Thumb is a Myth

There is a real estate rule of thumb that adding a set percentage to an advertised property list price will get you close to the selling price for a home. Ten percent used to be the magic number bandied around. This rule of thumb is false.

Real estate sellers are generally responsible for setting the property list price, sometimes with the aid of valuers and/or automated valuation models.

In Baulkham Hills, NSW the difference between the sold price and the list price for each auction ranged from 0.5% to 14.1% (March 2017). Whereas in Bulleen, VIC the difference ranged from 10.4% to 28.1% (March 2017).

The difference between the advertised list price and final selling price of a property varies widely.

Therefore do your own research using independent property price predictions.

 

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

NSW Suburb Sold Price vs List Price
1 Kingsgrove 4.4%
2 Surry Hills 5.7%
3 Randwick 6.5%
4 Kensington 6.5%
5 Fairlight 7.3%
6 Baulkham Hills 7.8%
7 Castle Hill 8.0%
8 Blue Haven 8.1%
9 Avalon Beach 8.2%
10 Dee Why 8.4%
Source: REALas.com March 2017

 

VIC Suburb Sold Price vs List Price
1 Wyndham Vale 6.7%
2 Maidstone 8.4%
3 Box Hill South 9.4%
4 St Kilda East 9.5%
5 Brighton East 9.5%
6 Craigieburn 9.5%
7 Niddrie 10.0%
8 Melton 10.0%
9 Port Melbourne 10.1%
10 Diamond Creek 10.5%
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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