Property Valuation & How to Value Your Home, as an Estate Agent, is what we specialise in. After so many years of advising people, we have not only accumulated knowledge of the markets and property types, but have also built and acquired a host of tools to help us be as accurate as possible. But, do you ever wonder what we do, or do we make it all up!
Where to Start when valuing property
Firstly, property, like anything else, has no specific value. Something is only worth what someone is willing to pay after all. But, we have to start somewhere and like a value of a car, or a food item, values tend to be based on what people have shown they are willing to pay.
Just as the pricing of a new car model can be influenced by the demand and success of its predecessor, property values are shaped by the pace of recent sales and the overall demand for housing.
The principle of supply and demand is a cornerstone in understanding these fluctuations – an oversupply tends to lower prices, while high demand can drive prices up, making the property more valuable.
If supply of something outstrips demand, price will lower and the item will sell more slowly. Where demand outstrips supply, the price goes up as it is more valuable, due to there being less of it.
Lets get specific
So, we have a house to value. We know what type of house it is, where it is, how old it is, how may bedrooms it has and any changes that may have been made to it.
We now want to see what else similar there is in the locality that may give us an idea of a base line value. There are, in the main, two ways to value a house. The first is by price (or £) per square feet. The second is by looking at what we call ‘Comparable’ property sales to establish likelihood of value.
Price per square foot
This method is generally reserved for new builds or larger city valuing. But, it does come in very handy when dealing with a property that has no comparable at all. However, this way of valuing needs established and quantitively sizable data to be accurate and for most Estate Agents who are not surveyors, it can be more difficult to come by.
Comparable Valuing
This is the most common type of valuing for property (and pretty much everything else out there). Surveyors use it alongside Estate Agents to gauge the value of homes. They both use similar technology in doing so. Comparable valuing is where your property is compared to other similar property that has sold and completed within a recent timeframe.
For Instance – Your home is a 3 bed semi detached. We would look at other semi-detached homes in the local area. Some will have sold, others might be for sale, some may not have sold or been on the market for an age. From here we can calculate what is and isn’t the right price area to be in.
Remember, a house that has been on the market for 4 or 5 months and not sold, isn’t a comparable to your home. No one has wanted to buy it, therefore it holds no value!
Once we have a base value, we need to look at any differences that could increase value or limit value. You may have a ground floor extension giving you an office. Have you added a conservatory? You might have more parking than other homes in your street. Or, you could have a smaller garden than most, or an older kitchen that a buyer might feel needs to be replaced.
When conducting a valuation, it’s crucial to consider the prevailing market conditions. Factors such as changes in interest rates, unemployment rates, and global events can significantly impact the public’s perception of the world. It’s essential to stay informed about media narratives as well. All of these elements play a vital role in ensuring a comprehensive and accurate valuation.
The Value
No one can give you a precise value of your home. It isn’t an exact science. However, if the above is done correctly, we should give you the right area of value to be in. If it’s right, buyers will pay the amount or more. If it isn’t, they may make offers. Get it really wrong and no-one will view!
Don’t take someone’s word for it when having a property Valuation
While neighbours may offer well-intentioned opinions, relying on professionals like Estate Agents or Surveyors brings in the crucial elements of facts and evidence. Valuing a home requires an objective assessment that goes beyond personal attachments.
When looking at values of you home, you must take a step back and look at the big picture, not so much as to what you hope it will be worth, more so – what will it be worth.
Your Estate Agent must evidence to you information relating to values, timescales and property details. This is so YOU can make the most informed decision you can when you set the value of your home to the market. If an Estate Agent is using the ‘finger in the wind’ approach to valuing, I would recommend you move on to another Agent!
Instant Valuation Tools
We have these tools available, and sometimes they are accurate. It depends on the system being used and where the data is being pulled from. In the main, they are designed to obtain details from potential sellers for Agents to call.
As Estate Agents, some of us have access to more complex valuing tools that lenders use! These tools can be more accurate as they take data from a range of suppliers like the Land Registry, the Office of National Statistics, and lender price indexing systems
Usually, Most Instant Valuation tools derive figures from the Land Registry. You have to be careful here. Remember, in a rising market where demand outstrips supply, its fine. But in a market where the price has fallen a touch it can give false figures.
Why is this? Sold price data from the land registry usually lags at a minimum of 3 months behind the date that you are valuing on. In most cases it can be 5 to 6 months behind. Therefore, data being shown on an Instant Valuation tool will be out of date. In a declining market, this could be very misleading and potentially damaging to your sale.
Always seek an Estate Agents opinion to corroborate any figures given online. You can try our Instant Valuing tool by clicking here – Skilton & Hogg Instant Online Valuing tool.
What tools do we use for Property Valuation?
I have a range of various data sources to ensure we can give you the best opinion of value possible. A few are below, plus a useful tool if you wish to look at the value of your home alongside various other bits of information, some of which you might not know! (it’s free to use)
- Rightmove Report – The UK’s largest property portal is the first stop. As an agent, I have access to the back office of Rightmove, so can obtain more detailed property information that what you can see on the site. This includes historic properties listed and time on market.
- Zoopla – Again, with special access to behind the scenes, I will access value reports compiled by Hometrack. Hometrack is used by a number of main lenders & Surveyors for accurate opinions on value.
- Streets Insights – another bit of tech that I pay for, to enable me to give you more accurate information and also relevant information to give to buyers on your behalf. Pricing data is derived from various sources such as the office of national statistics. It also gives you an idea on title/boundary lines and even your broadband strength! You can have this report for free – click here – Free Property Report
- Nationwide property price indexing – a free to use tool, just click the wording and you can add you post code and what you paid, it will give you Nationwide’s view on price growth or decline over any period to date.
On top of this, there is course local properties that we have sold. These are a good barometer of demand and activity levels.
Property Valuations in Daventry & Rugby
I hope that has given you some idea of what goes into property valuation and also that we take it very seriously. Giving the wrong value could cost you in the long run. Be aware and ask questions of any Agent claiming value or promising to sell your home for a certain figure – as no one knows until you are on the market and someone commits to buying!
Here at Skilton & Hogg, I offer a free no obligation Property Valuation and Market Appraisal. All the information , data and presentation will be left with you for you to look through at your own leisure.
Book your Free and Full Valuation here – Skilton Hogg Free Valuation
All I ask, particularly in this market, regardless of which agent you choose to help you. Is that you market at the right price based on fact, not the ‘what if’ price. By doing it that way, you will find a buyer.
Author – David Bruckert. Owner of Skilton & Hogg Estate Agents
