{"id":13255,"date":"2017-08-16T01:00:34","date_gmt":"2017-08-15T15:00:34","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=13255"},"modified":"2017-08-16T01:00:34","modified_gmt":"2017-08-15T15:00:34","slug":"getting-the-most-when-you-sell-what-impacts-price-kent-lardner","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/getting-the-most-when-you-sell-what-impacts-price-kent-lardner\/","title":{"rendered":"Getting the most when you sell – what impacts price – Kent Lardner"},"content":{"rendered":"

We talk about what influences property price fluctuations in a particular area but what will impact the price of an individual property? Kent Lardner<\/strong> from VIEW <\/a>is the genius behind many of the desktop valuation models in Australia and he talks about how they can pick what will impact the price of your property.
\nTranscript :<\/strong>
\nKevin:<\/b>\u00a0 Just what influences price? What\u2019s going to impact the price of your property or even what should you be looking for when you\u2019re looking to buy a property? Kent Lardner is from View.com.au.<\/a> It\u2019s a company you\u2019re going to hear a lot more about.
\nKent, thank you very much for your time. I\u2019m just keen to know from you \u2013 because I know you\u2019ve done a lot of modeling on this and you\u2019ve looked a lot at what creates value in a property \u2013 what are the key drivers that you see?
\nKent:\u00a0 <\/b>The most common valuation technique that\u2019s used out there is really matching three comparable sales. We\u2019re looking at properties that have sold recently in the local market of a similar size.
\nSome of the things that go into driving that price are those things we can measure \u2013 such as a bedroom count, a bathroom count, a car space, or whether they\u2019re on a main road or not \u2013 but then there\u2019s the stuff that we can\u2019t measure, which really comes down to quality. That\u2019s where the human comes into it and can match up comparable sales that are truly comparable, based on build quality and finish or things such as views.
\nKevin:<\/b>\u00a0 Some of those things that you mentioned there that add value can also detract value, a classic example being too close to a main road, being close to heavy transport, factories, and so on. Have you got a feeling for how much they impact negatively the price of a property?
\nKent:<\/b>\u00a0 A lot of these things can certainly be a double digit when you compare it properties that are further away. Typically, what we do is when we find something that\u2019s a little bit adverse nearby, you always look for comparables that are very close by or on the same street so that they\u2019re all sharing the same dimension.
\nA railway is a good example. Being right next to the railway line, overseeing the railway line, you look for other properties in that same location looking at the railway line. But then you go back one or two streets, you don\u2019t see the railway line but you have walking distance to the station, so it becomes the opposite of that and becomes an attribute, a positive feature, towards price.
\nKevin:<\/b>\u00a0 What are some of the other things that would drive price? We hear a lot of talk about pools, whether or not they add any value. What\u2019s your view?
\nKent:<\/b>\u00a0 I\u2019ve seen research that says one thing one week and another thing another week. Typically, what we find when we try and model and use pools, probably the first thing to call out is we don\u2019t have a robust data set that applies to every single property with a pool, but you can often find that it would influence anything up to $20,000 or $30,000 we\u2019ve found in some of the models. But more often than not, where we\u2019ve tried to test pool as a variable in our models, it\u2019s so hard for it to stand out and be what we call statistically significant.
\nIt\u2019s an unreliable measure from a statistical perspective, so what we often fall back to is the anecdotal piece, which is a lot of pools are attached to a renovated house or are part of a style of property or finish of property that its cohorts are also renovated and therefore, the prices are higher.
\nKevin:<\/b>\u00a0 What you\u2019re saying, I guess, is why would you put a pool in an unrenovated property, where it\u2019s not going to add much value? But you renovate the house and you probably double the value of the pool.
\nKent:<\/b>\u00a0 That\u2019s right. Then it becomes a different market or submarket. There are people out there who say, \u201cI want a renovated house and I want a pool, and I can afford both,\u201d so it creates an entirely different market. People are only looking or searching for that style of property.
\nKevin:<\/b>\u00a0 Talking about values, is there a standard value you can put on, say, a bedroom, the difference between a three- and four-bedroom home?
\nKent:<\/b>\u00a0 The interesting thing\u2026 We call this multiple-regression modeling. How we use this is we take all the sales that happen in a given location, we\u2019ll pick on a suburb, and then what we do is we bundle them all up and we look for how much the sale price varies on average for a one-unit change in something: a one-unit change in land size or a one-unit change in bedroom or a one-unit change in bathroom.
\nThe one that often stands out \u2013 and most people don\u2019t realize this \u2013 the bathroom, more often than not, is the big value item. When we do this, we do it entirely objectively. We let the numbers talk to us, obviously. We\u2019ll let the data speak, as the saying goes. The bathroom often would have, say, as an example, $100,000 coefficient value and the bedroom might only be $30,000, which is really interesting.
\nThe standout for me and the lesson learned here is if you\u2019re really comparing property A to property B, that tells me that you should always have the same bathroom count, because if the bathroom represents the biggest value, you want to make sure you\u2019re looking at apples with apples. You really want the same bathroom count.
\nThe other interesting thing \u2013 and this is just my hypothesis \u2013 is that a property with a one-bathroom count is often a very different style of property to a two bathroom. If I\u2019m renovating a house, I buy the old original house that\u2019s 60 or 100 years old, they\u2019re all one bathroom. So, suddenly, when I renovate it, I\u2019m not going to leave it as a one bathroom; I\u2019m going to add a second bathroom. The two- or three-bathroom house isn\u2019t just purely the bathroom count. It\u2019s also reflective of the fact that it\u2019s a renovated property, so that accounts for a lot of that variance in value.
\nKevin:<\/b>\u00a0 It\u2019s pretty similar to what you\u2019re saying about the pool, isn\u2019t it? It\u2019s what you expect in a property. I guess buyers generally expect a certain level of accommodation in a certain price range, Kent?
\nKent:<\/b>\u00a0 What people are doing when they\u2019re searching for properties is they\u2019re filtering. A lot of people say, \u201cI only want a two-bathroom house,\u201d so when they\u2019re looking for their properties online, they\u2019re actually ignoring anything \u2013 not even viewing a property \u2013 that\u2019s a one bathroom if they are looking for that larger property.
\nYou will get some people saying, \u201cI want this location. Therefore, I\u2019m willing to renovate. I\u2019m willing to extend. I\u2019m willing to put up with a one bathroom.\u201d But then you have a whole market out there, a whole bunch of buyers, who specifically say, \u201cI don\u2019t want to do any work. I\u2019m over the renovation thing. I just want to spend my money and move in.\u201d
\nKevin:<\/b>\u00a0 Fascinating conversation. Kent Lardner, from View.com.au.<\/a> Check out their channel on RET, as well, because there\u2019s a lot of really great information in there, and Kent, of course, supplying some good data for us, as well.
\nKent, thank you very much. Look forward to catching up with you again real soon.
\nKent:<\/b>\u00a0 Thank you, Kevin.
\n <\/p>\n","protected":false},"excerpt":{"rendered":"

We talk about what influences property price fluctuations in a particular area but what will impact the price of an individual property? Kent Lardner from VIEW is the genius behind many of the desktop valuation models in Australia and he talks about how they can…<\/p>\n","protected":false},"author":176692471,"featured_media":14625,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10,11,13,36,22,23,25],"tags":[101],"class_list":["post-13255","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-property-investment-topic","category-research-topic","category-selling-a-property-topic","category-sponsored-channels","tag-podcast"],"yoast_head":"\nGetting the most when you sell - what impacts price - Kent Lardner - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/getting-the-most-when-you-sell-what-impacts-price-kent-lardner\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Getting the most when you sell - what impacts price - Kent Lardner - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"We talk about what influences property price fluctuations in a particular area but what will impact the price of an individual property? 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