Just as with every single profession out there, realtors can make mistakes. Some will be common while others will not be. It is always a really good idea to hire realtors with high experience like One Percent Guys but you cannot always afford something like that. You may end up cutting some corners and going for a cheaper realtor that has a higher possibility to improperly valuate a property. The most common valuation mistakes that are done by realtors are the following.
Thinking An Extra Bedroom Ads A Lot Of Extra Value
This error is quite common. Bedrooms are normally going to add property value but the simple addition does not actually guarantee that this is the case. For instance, when the house has many bedrooms, an extra bedroom will not actually add extra value. Potential extra value appears simply because of the square footage available. When two homes have the exact same size, with one having an extra bedroom, overall property value is not necessary higher. It is possible that other rooms are smaller or another problem is present in terms of actual property value.
The exception is based on how the neighborhood is laid out. When most homes have 2 or 3 bedrooms and you only have one bedroom, if you add an extra bedroom instant property value is added.
Square Footage Incorrect Adjustments
This error is less common but it is quite devastating. The idea is to use the strict square foot price model to value homes. Agents tend to make this mistake when they do not have a lot of experience. Average prices at a per square foot rate can be incredibly inaccurate to determine whole property value. Area will surely offer values but that will not actually account for many important things.
Adjusting for size is definitely a necessity. A large home will naturally carry increased value. However, not making adjustments based on all extras that are present is something that can easily lead to huge problems. The idea is to always focus on what is actually offered by the property, not buying the largest or the smallest one.
Comparing Homes That Have Non Similar Styles
This is quite a funny mistake but it happens more often than what we may think. The mistake is to basically compare two homes that have different styles and thinking that they are the same in terms of value. It is important to mainly consider appeal in terms of what the buyers would be interested in. Two homes that are identical in size and that have different styles can have different values just because of the style. Inexperienced real estate agents will almost always forget about this factor.
As you can see, realtors can make mistakes in their valuations. This is why it is sometimes recommended that you get valuation done by different realtors and consider the average as being the actual value of the property. This offers a clear indicator of value in both the case when you want to buy a home and when you want to sell a home.