Why it pays to know the current valuation of your property

The case of a real estate agent who on-sold two properties for $80,000 more than the original price, just days after the initial transaction, demonstrates why it is important to have up-to-date valuations of properties.

Thursday, April 9th 2015, 4:13PM

by Miriam Bell

Michael Edward, and his employers (Jones Lang LaSelle), were censured and fined for unsatisfactory conduct by the Real Estate Agents Authority this week.

Edward handled the sale of two side-by-side units for the complainant in the case.

The units were sold for $386,000.

However, within days of the transaction, the buyer relisted both units for sale, and they quickly on-sold for $235,000.00 and $233,500.00.

Edward was responsible for the on-sale of one of these units.

The complainant initially approached Edward about getting a market appraisal for both sale and rent of the units.

A market appraisal was never provided but the complaint and Edward had a verbal discussion about comparative sales in the area.

It was on this basis that the complaint accepted the offer of $386,000 for the units.

Shortly afterwards, he discovered both units had been on-sold immediately for a significant increase in price.

He concluded that Edward had undervalued the units in their dealings and complained to the Authority.

The Authority found that Edward had failed to act in the complaint’s best interests; had not provided the complainant with a written appraisal of the units; and that there had been no signed listing agreement in place when the units were offered for sale.

Further, the Authority censured Jones Lang LaSelle for failure to provide adequate supervision to Edward and for their inadequate processes when handling unit title listings.

Edward and Jones Lang LaSelle were censured and ordered to refund commission of $8,878 to the complainant.

Property Institute chief executive Ashely Church says the case is a good example of why knowing the current valuation of your properties should be more than a matter of curiosity and academic interest.

“If you’re selling a property or wanting to use the equity in it to borrow money it’s important that you get the most up-to-date valuation possible.

“This will put you in a stronger bargaining position if you want to sell – and any increase in value could give you more clout with the bank if you want to borrow money to make a purchase or buy a business.”

Church says that people are often not aware of just how much the value of a property can increase between council valuations.

“If you live in an area where prices are rising – a recent valuation could be worth tens of thousands of dollars to you. Knowledge is power.”

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