Myth about Property Appraisal Websites

Market appraisal, property appraisal, property value, market value or property worth websites market themselves at providing property owners with NO obligation FREE market appraisals on an owner’s property. A FREE market appraisal is what owners initially receive, but looking further into the chain of operation you see that it isn’t FREE from cost or obligation for the property owner.

How it works is, these property appraisal websites don’t actually perform the market appraisal for a property. In fact, they don’t do anything other then collect the details of property owners who would like their property valued. Once these property appraisal companies have an owner’s details they pass the details on to a local real estate agent who performs the property appraisal.

The question is, how do these property appraisal websites make money? Easy, they charge the local agent a fee in exchange for the property owners contact details. Each property appraisal company usually has one preferred agent they use in each suburb, often determined by the agent who is willing to pay the highest fee to the property appraisal company in return for contact details. So your contact details that you innocently provided a property appraisal company are basically being traded like commodities.

So why is it that real estate agents pay for property owner details? Simple, because agents know these property owners are interested in selling their property. If the agent performs a free property appraisal then perhaps the property owner will use them to sell the property.

There are two reasons why a no obligation FREE property appraisal is not actually FREE from obligation or cost to the property owner.

Firstly, most real estate agencies use the service of at least one property appraisal website, meaning they pay this website a fee for each lead they receive. The fee agents pay to purchase these property owner leads is then passed on to property owners through higher sales commission they charged once their property is sold. This means the property owner indirectly pays for the market appraisal regardless of which agent they choose to sell their property.

Secondly, property owners have no obligation to the property appraisal company but depending on the way you view things they do have an informal obligation to the real estate agent who performed the property appraisal. Not only has the real estate agent forgone time in preparing the property appraisal but they have also paid a fee to the property appraisal company for the contact details. The agent will be determined to recoup their time and money and will continue to market their services towards that property owner in an effort to win that listing.

Now we have explained the shortcomings of a no obligation FREE property appraisal for property, let’s discuss how accurate the market appraisal is.

The way these property appraisal systems are structured is to discourage competition amongst real estate agents. Most property owners will only use one market appraisal company to receive a property appraisal from. As the property appraisal company forwards the property owner details to only one agent in that area means that subscribing agent has a monopoly over property appraisals in that area.

Now, real estate agents are fully aware they have exclusive rights to the details for this property owner. Meaning, they can under quote or over quote the value of property in an effort to persuade the owner to use their services to sell the property.

So next time you consider entering your contact details into a property appraisal website to receive a free no obligation property appraisal have a think about how the process operates and the future ramifications for you.