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A guide to property valuations

Published: 12th September 2018

A guide to property valuations

Valuing a home correctly from the outset is a vital first step in getting the home-selling process off to a good start. Setting an asking price either too low or too high can actually deter buyers, albeit for different reasons. Advertising a home at too low a price can give buyers the impression that there is something wrong with it.

Advertising it at too high a price can give buyers the impression that there’s no point in even going to view a property they can’t afford. Too high a valuation can also create unrealistic expectations for the sellers and perhaps lead to them making plans to spend money they’re actually very unlikely to receive.

The skill of valuing a house accurately

It’s true that valuation is part art as well as part science and therefore it’s also true that different estate agents may interpret the same set of data in slightly different ways and therefore give slightly different valuations. It is, however, also, sadly, true that some agents will knowingly inflate the price of a home in order to get the contract to sell it. They can then pressurise the home owners into reducing the price over time, to a more realistic level.

With this in mind, home owners are well advised to take some time to learn about the valuation process and to ensure that they are confident that their estate agent has given them a realistic valuation before they take the final decision on what estate agent to use and certainly before they sign up to an exclusive, long-term contract.

Accurate property valuations are based on (adjusted) comparables

A valuer will look at the selling price of similar properties in your area and make adjustments as necessary for any features which make your house different from the other properties. Their assessment will be based on what might be called measurable criteria, such as the physical size of the house (and any land), rather than less tangible criteria such as the state of the decor, even those these criteria can certainly influence the price for which the house is ultimately sold.

The criteria which influence a valuation may not be immediately obvious, even if you are familiar with the local area or the actual property, and one clear sign of a valuer who knows what they are talking about is that they will be happy to explain (in plain English), how they arrived at the figures. It could be something as simple as the owners of the other home including premium white goods as part of the sale, while you intend to take your appliances with you.

Experienced valuers learn to go with the flow

The property market as a whole moves in a fairly regular cycle. There is, however, the complication that the state of the property market as a whole is of very little relevance to the average home owner.

What matters is the state of the property market in their local area (and the state of the property market in the area to which they wish to move, if this is different). It’s important to understand that local property markets in different parts of the UK can be at very different points in their cycle, so the fact that someone you know has seen their home increase considerably in value over the last few years does not mean that your home will necessarily have increased by the same percentage. On the plus side, the reverse is also true.

The asking price can be adjusted to reflect the seller’s situation

If a seller indicates that they are in no immediate hurry to move then a valuer may suggest going for the upper end of what could reasonably be expected to be achieved in order to test the waters.

If there is a lack of interest, then the price can always be brought down afterwards. If, by contrast, the seller simply wants the property to be sold as quickly as possible, perhaps in the case of a probate sale or when the seller has had a compelling work opportunity, then the valuer may suggest simply going for the lower end of what can realistically be achieved in order to generate interest.

Be careful about setting your assumptions based on asking prices

At the end of the day an asking price is just that, an indication of what the seller thinks is a reasonable price for the property. Ideally the asking price should reflect a realistic valuation but, as previously mentioned, this is not necessarily the case and even when it is, the asking price may be set at the highest possible realistic level rather than at the level which might attract the most interest. Achieved sales prices reflect actual complete sales and are therefore based on fact rather than (optimistic) opinion.

If you found this article useful and you are considering selling your Manchester property then please contact our local area experts at Indlu who are more than happy to answer any questions you may have. Alternatively, why not use our free online valuation tool to see how much your property is worth!

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