Last Updated on January 9, 2026 by Andrew Mckiggan
A property appraisal is meant to give homeowners a realistic view of what their property could sell for in the current market. When it’s accurate, it helps set expectations, informs pricing strategy, and protects negotiation outcomes. When it’s wrong, the impact is often delayed — emerging weeks later through lost momentum, buyer resistance, or avoidable price adjustments.
This article explains why property appraisals in Australia can be wrong, how those errors typically occur in practice, and — most importantly — how to recognise the warning signs early, before they affect the final result.
It’s written for property owners who want clarity before committing to an agent or pricing approach, not reassurance after the market has already responded.
Property Appraisals vs Valuations in Australia (An Important Distinction)
In Australia, a property appraisal is an opinion provided by a real estate agent about a likely selling price, based on current market conditions and buyer behaviour. It is not a formal valuation.
A property valuation, by contrast, is completed by a qualified valuer and is typically required for lending, legal, or taxation purposes.
Because most homeowners rely on an appraisal when selling, the quality of the agent’s judgement, evidence, and assumptions matters far more than the number itself. If you’re unsure how these two differ, this guide provides a clear breakdown of how property appraisals differ from formal valuations, and when each is used in practice.
Before relying on any appraisal, it’s also worth confirming that the person providing it is appropriately licensed or accredited. In Australia, real estate agents must be licensed under their relevant state or territory authority, and formal property valuations can only be completed by qualified valuers. For South Australian residents, agent licence details can be checked through Consumer and Business Services.
Why Property Appraisals Miss the Mark: The Australian Context
1. “Buying the Listing” (Pricing Optimism as a Tactic)
In competitive Australian markets, some agents may present an optimistic appraisal as a way of securing the listing rather than reflecting likely sale outcomes. This approach is often described as “buying the listing” — not because the price is guaranteed, but because a higher figure increases the chance that a seller will sign an agency agreement.
The dynamic behind this is largely human. When multiple appraisals are presented, most sellers naturally gravitate toward the most optimistic figure. The higher number feels like a possibility, even if the supporting evidence is thin. This response isn’t irrational — it reflects a common bias toward better outcomes when selling a major asset.
The issue tends to surface after the property launches. Once buyer feedback begins to arrive, expectations are often adjusted downward through a process commonly known as conditioning. By this stage, the most valuable phase of the campaign — the golden window of the first 14 days — has usually already been missed. Buyer attention has peaked, early competition has faded, and momentum has shifted away from the seller.
At that point, the focus often moves from maximising interest to managing expectations, with pricing discussions framed as responses to market resistance rather than the original appraisal. The key warning sign isn’t a high figure on its own — it’s a high figure that cannot be clearly explained using recent, comparable sales and current buyer behaviour.
For sellers who want a deeper understanding of how this process unfolds in practice, including how optimistic pricing, missed early momentum, and conditioning are connected, this is explored further in a deeper explanation of how pricing tactics are sometimes used to win listings rather than sell homes, including a video breakdown.
2. Confusing “For Sale” Prices with “Sold” Evidence
Appraisals become unreliable when asking prices are treated as proof of value. In Australia, a property listed for sale represents competition — not evidence.
Sound appraisals rely primarily on settled sales, ideally from the last 90 days. In changing interest-rate environments, sales older than six months may no longer reflect current buyer behaviour.
3. Ignoring the “Golden Window” (The First 14 Days)
A wrong appraisal doesn’t just delay a sale — it can weaken it.
In Australia, the highest-intent buyers typically inspect a property within the first two weeks of it appearing on major portals such as RealEstate.com.au and Domain. This early period is often when competition is strongest.
If a property is overpriced during this window, those buyers may move on. Even if the price is adjusted later, that early momentum is difficult to recover.
4. Failing to Separate Land Value from Improvements
Broad suburb medians can be misleading. A more considered appraisal often separates:
- land value (based on size, zoning, and location), and
- improvement value (the dwelling, condition, and features).
If an agent can’t explain how adjustments were made for specific characteristics — such as garages, solar systems, renovations, or layout — the assumptions behind the figure may be incomplete.
Early Warning Signs an Appraisal May Be Wrong
🚩 The appraisal highlights positives only
If no potential buyer objections or limitations are identified, the appraisal may be more promotional than analytical. Accurate appraisals acknowledge both strengths and constraints.
🚩 The price range is unusually wide
In most Australian states, agents are required to provide a price range. An excessively broad range can indicate uncertainty rather than flexibility.
🚩 Market optimism isn’t supported by evidence
Statements such as “the market is hot” or “buyers are paying premiums” should always be backed by recent, comparable sales — not general sentiment.
What Happens When an Appraisal Is Wrong
When a property is priced based on weak assumptions, the most common outcomes include:
- reduced early buyer engagement
- extended days on market
- price adjustments that signal resistance
- diminished negotiation leverage
Under-pricing without strategy can also introduce risk, particularly in markets where buyer demand is uneven.
The cost of an inaccurate appraisal is rarely immediate — but it is usually clear by the end of the campaign.
How to Evaluate an Appraisal Objectively
When reviewing an appraisal, sellers often find it helpful to examine the underlying comparative market analysis (CMA) and consider:
- Recency: Are the sales from the last three to four months?
- Proximity: Are the sales genuinely comparable in location and zoning?
- Adjustments: Are differences in features or condition clearly explained?
Frequently Asked Questions About Property Appraisals
Why do some property appraisals seem higher than the market evidence?
n some cases, an optimistic appraisal can be used as a way of securing a listing rather than reflecting likely sale outcomes. This approach is often referred to as “buying the listing” and relies on a natural human tendency to favour the most positive scenario when selling a major asset.
The risk isn’t the higher figure itself — it’s what can follow. If a property launches above what buyers are prepared to pay, the most valuable period of the campaign — often the first 14 days — can be lost. Buyer interest typically peaks early, and once that initial window has passed, momentum and negotiating leverage are harder to recover.
At that point, sellers may find expectations being gradually adjusted back toward market reality through a process commonly known as conditioning. Understanding how optimistic pricing, missed early momentum, and conditioning are connected is critical for avoiding this outcome. We explore this in more detail in how optimistic pricing can lead to conditioning and weaker sale outcomes, including a video breakdown.
How accurate are property appraisals in Australia?
Property appraisals are estimates, not guarantees. Their accuracy depends on the quality of recent comparable sales, the agent’s local market knowledge, and how closely buyer behaviour is considered at the time of assessment.
Why can two agents give very different appraisals for the same property?
Differences usually come down to assumptions. Agents may weigh comparable sales differently, interpret buyer demand in different ways, or apply different pricing strategies when positioning a property for market.
Is a higher appraisal always better when selling a property?
Not necessarily. An appraisal that sits above market evidence can reduce early buyer interest and weaken negotiating leverage, particularly during the first weeks of a campaign.
What’s the difference between an appraisal and a valuation in Australia?
In Australia, an appraisal is a real estate agent’s opinion of likely sale price, while a valuation is a formal assessment completed by a qualified valuer for legal or lending purposes. Each serves a different role and is used in different situations.
Can a wrong appraisal affect the final sale price?
Yes. Overpricing early can reduce competition, increase time on market, and lead to later price adjustments that signal buyer resistance.
Final Thoughts
A property appraisal is one of the most influential decisions made before selling — and one of the least understood.
By understanding how appraisals go wrong, recognising early warning signs, and focusing on evidence rather than optimism, property owners can protect their outcome and avoid costly missteps.
An informed appraisal doesn’t just support a sale — it protects the result.
