Pricing, Appraisals and Auction
Setting the appropriate price for your house is very important, because if you set it too high, buyers may ignore it and it can sit unsold for months, and if you set your price too low, your house might get sold fast, but you will lose your profits. Our guide will help you set the right price by using real evidence, explaining what the real meaning of appraisals and valuations is, how capital gains tax may apply, and most importantly, how to set a smart reserve price if you are planning to sell at a property auction. Our property price calculator can help you estimate potential CGT on your profit.
The short answer
To set a price that doesn't raise eyebrows of the buyers, you need to research recent sales, current market conditions, and agent appraisal. An appraisal is a free estimate that an agent gives you, that act as a starting point, but don't mistake it for binding. On the other hand, a valuation is an official, paid assessment that's more accurate and detailed than an appraisal. If you have decided to sell at a property auction, your reserve price will be the lowest amount you're willing to accept. This is the lowest price you can go. People who are selling for investment purposes should know that they have to pay capital gains tax on any profit they make from the sale, reducing how much money they will actually get.
Capital Gains Tax Estimator
Our property price calculator will help you estimate the potential CGT on your profit, whether it's for investment purposes or your second home.
Your marginal tax rate
Very simplified. Ignores buying/selling costs, capital improvements and the main-residence exemption. Not tax advice — confirm with your accountant.
Estimated capital gains tax
$37,500
payable on this sale
Appraisal, Valuation or Pricing Method?
Most of us always get confused when it comes to the following points. Let's see how these three are different from each other:
- ✓Appraisal: You can either hire a real estate agent or take their help to determine a rough estimate of your property based on the current market and trends.
- ✓Valuation: By using a property price calculator or hiring a licensed valuer, you can find out the exact value of your property.
- ✓Get more than one appraisal, and be wary of an inflated figure quoted just to win your listing.
The Details, Expanded
Tap on any section for a detailed explanation.
"Comps" are homes that are similar to yours, helping you to figure out what a fair price would be. Find properties with similar size, condition, and location that have been sold in the last few months. Recent sales matter more than old ones.
FAQs about Pricing and Auction
How to know if the price I choose to sell my house at is appropriate or not?+
You can compare recent sale prices of similar homes in your area, look at the current market conditions, and an agent's appraisal. You can stay a step ahead with a valuation that offers further reference points.
An appraisal and a valuation, what's the difference between them?+
An appraisal is known as the agent's free, an informal estimation, while a valuation is an official paid assessment of your property conducted by a licensed valuer.
What is an auction reserve price?+
An auction reserve price is the lowest price you will accept at an auction.
Do I have to pay capital gains tax when I sell?+
Your main home is generally exempt from capital gains tax. However, selling investment properties or second homes can trigger CGT on any profit you make. If you owned the property for more than 12 months, you may be eligible for a 50% discount on the taxable gain.
Price it right from day one
Get an evidence-based appraisal from a verified local agent who knows recent sales in your suburb.