Just how do Real Estate Agents put a value on your home?

James Jeffries
There are two components to arriving at a valuation for a property. The First question we ask ourselves is: "What is the Land worth?" The second we ask is: "Does the house add value to the land?"

This first step is relatively easy for an experienced agent, who knows his/her area well. They will know recent sales in the area, and the street, or similar streets nearby. So they will have an idea of a land price per square meter, or if they are like me and have been around for a while, per square foot. This is a great way of comparing blocks of different size, and is not the same for all areas. For example, there are different parts of say, Glen Iris. We recently sold a block of land in Iris Rd (a beautiful tree lined street) for $163 per square foot. Where as a corner block on nearby busy Toorak Road only achieved $123/sqft. On a typical 9,000/sqft block, this is a difference of $350,000.
This varies widely from suburb to suburb. A tree lined street like Iris Road in Toorak for example, could bring $500/sqft.
While the short term market for land can rise and fall, the long term trend is always upwards. Recent experience in Melbourne's inner east is that prices peaked in late 2010, and then dropped off a little. However last year, prices started to rise again and we are now almost back to where we were in 2010.

Houses are a bit like cars, as soon as you drive them out of the showroom, they drop in value. However, when they get really old they become rare and, if they are maintained well, start to rise in value. So, a 1950's triple fronted, cream brick vanear in 'original' condition (ie; never been touched) is going to add less value than a beautifully renovated, double fronted Victorian or a classic Wayne Gillespie designed family home.

If you would like an honest, no obligation, expert opinion on your home's value, please call me on (0418) 177-101.