30 Nov The reports you can rely on – Kylie Davis
Nearly one in every two buyers looking for a new home are currently armed with a property report and increasingly, banks and mortgage brokers are providing their clients with property valuation data to help them get ‘buyer ready’. But how much security does a property report really give you? Kylie Davis is the Head of Content and Property Services Marketing at CoreLogic and runs the CoreLogic Report Store. We ask her advice.
Kevin: I was startled to see the other day that nearly one in every two buyers – that’s 50% of buyers – looking for a new home these days are currently armed with a property report, and increasingly bank and mortgage brokers are providing their clients with property valuation data to help them get buyer-ready. You might have seen those ads on television where some of the major banks are actually advocating that you get these reports.
Just how reliable are they? It’s a question I’ve asked quite often. I’m going to ask that question now of someone who should know and does know. Kylie Davis is the head of content and property services marketing at CoreLogic, and she also heads up the CoreLogic reports store.
How accurate are these reports, because obviously as we just heard, about 50% of buyers are relying on them, Kylie?
Kylie: They’re a great way to do research about the market and to be prepared for what you’re about to go through as a property buyer. They are certainly more reliable than just asking friends or family what they think the market is doing, because they give you really deep-dive insights into the individual property and can provide you with some really valuable information.
That said, they’re not the price of the property when it comes to a sale situation, and the value in them is not cast in stone. It’s based on algorithms that are extrapolating what a property is worth based on similar properties around it. And that data can change on a weekly basis as more sales and more information comes into the system.
The best way to go about it is to definitely look at a report to make sure that your information is based in data and fact, not just enough opinion, and to use that report to back up or to question or put a contrast to what the real estate agent has told you, but then you have to assess what’s happening in the sales situation.
If you’re the only buyer there, then yes, what you’re seeing in the report is very probably a fair and reasonable price for that property, but if you’re not the only buyer, if it is a lot of competition for that property, then the valuation you see in the report is probably a starting price as to where bidding is going to start.
Kevin: It’s a pretty important point, I think, and that is that these reports should be treated as a guide; there are more definitive ways to work out what you are prepared to pay for it. And as a buyer, that’s what value is; it’s what a willing buyer is prepared to pay, Kylie.
Kylie: Yes. And I think that’s why the auction systems is so popular in some states, because a property is worth what someone is prepared to pay for it, where the market is prepared to go, and an auction lets you see where the market sits really quickly.
Where we see people getting disappointed with property reports is where they feel or believe that that report is the top amount that they should expect to pay. And that’s not realistic. It really is a guide to help you understand “Can I afford a property in this price range, or should I be looking at up or down at other properties higher or lower than what this is coming out?”
If you’re turning up to an auction thinking “If it goes for this much, we’re out,” it’s probably a little bit too high for where your budget is at.
Kevin: I guess if a property sells for more than more than the report states, because there is a lot of interest and strong bidding, it doesn’t necessarily mean that those people have paid too much for it or even that the agent lied; it’s just that they’re market forces. That’s how it works, Kylie, isn’t it?
Kylie: Absolutely. If you have competition for a property, then the value of the property will be the money that the person who has the most is prepared to pay for it. So, just because a report has been run on it, it doesn’t mean that the price that’s being quoted has been cast in stone, and it certainly doesn’t mean that the agent had under quoted it.
Kevin: Good points. Kylie Davis, head of content and property services marketing at CoreLogic. Kylie, thank you for your time. We’ll catch you again soon.
Kylie: No worries. Thank you, Kevin.