The Tricks of the Valuation Game
Once you have made the decision to sell your home, the first thing you need to do is determine the value of the property. It is vital to get an accurate valuation based on the true market value of your home – if the valuation is set too high you will simply deter potential buyers, and if it’s too low you could risk losing out financially.
Increasingly, homeowners are being forced to accept offers much lower than the initial valuation. There are many potential reasons for this, however it can be largely due to Estate Agents providing homeowners with an unrealistic initial valuation, to give themselves the competitive edge and generate a higher commission.
The best way to protect yourself against an inaccurate valuation is to brush up on your knowledge of the local property market and specifically your own property so you are not taken down a path that could potentially lead to disappointment.
To help guide your assessment, here property expert and CEO of We Buy Any Home, Elliot Castle, shares with us his tips and tricks for getting an accurate property valuation.
KNOW YOUR MARKET
“Valuing a property is about understanding your competition and buyer demand, so believe it or not spying on your neighbours is a good place to start!” Elliot tells us as we sit down to speak with the CEO just before the Bank Holiday weekend. “It’s important to investigate the prices of similar houses in your area and how much they are selling for to guide your own valuation. Remember, there is a big difference between the marketing price of a property and the selling price – therefore it is key to not solely rely on the asking price as a guide, but always look at how much the property sold for.”
You can use property websites to look at the going rate for houses in your town, and try to gauge how the property market is performing in your area by looking at how quickly houses are selling. “Making a note of how the property market in your area is performing and varies over time will help you to decide when is the best time to sell.” Says Elliot.
DO THE MATHS
From speaking with Elliot over a good cup of corner-café (and pastries) we soon learned that judging the worth of a home based on the number of bedrooms and rooms alone is oh-so very outdated. “I would encourage every homeowner to abandon this traditional approach, and consider a number of aspects such as ‘price per square foot’, the size of garden, work needed to the property, and the number of bedrooms to work out the worth of a property. Looking at square footage works well, but only really if you are selling a flat.”
He further explained: “To estimate the price per square foot you need to examine the sale price and square footage of a similar, nearby property.
For example, if your next-door neighbour’s house is 1,500 square foot and sold for £450,000, divide the price by the space per square foot to get an approximate value. (So, 450,000 divided by 1,500 equals £300 per square foot.) You can then multiply your own home’s space by the price per square foot to get a rough value.”
That’s some great advice right there that we will be sure to take note of! However, the CEO stressed that it’s important to bear in mind that the outlook doesn’t just apply to the inside of the house. In other words, you should also consider the size of the garden, drive, patio, and garage (if you have them) as they all contribute to the scope of the property.
But the price per square foot can change over time; so, if your neighbour’s house was sold a year ago for example, Elliot says that it’s likely that the price per square foot in this area has changed. “To make the valuation as accurate as possible, it’s always best to compare with properties which were recently on the market.”
STUDY YOUR SELLING POINTS
The size of the property isn’t the only feature to take into consideration when trying to work out the value your home. “It’s also very useful to get to know its key selling points, as these will be the deciding factor for a lot of buyers.” Elliot tells YCB.
“Be proactive by carrying out lots of research into your property and the area that it resides in, as you may unearth some unique or sought-after features which will add to the property’s value.” According to the We Buy Any Home CEO, the key features to take into consideration are:
– Location
– Storage space
– Crime rates
– Local amenities
– School catchment areas
– Transport links
– Planning permission
And if you live in a flat or apartment?
“It’s sensible to consider the features your flat offers, or perhaps doesn’t offer, compared to similar nearby homes.” Elliot states. One should consider the following;
– Do you have your own front door?
– Do you have your own garden, or a communal garden?
– How many access points are there to your property?
– Can your property be extended?
– Is there a place to park?
Elliot explains that ground floor flats tend to generate higher offers because they have access to gardens or can be extended. You should therefore snoop around the neighbourhood and make a list of all the features that your property has, or is lacking, to help to guide your valuation. You can also highlight some of the improvements you recently did in your home, like getting a new fence with the help of a fence company or hiring a foundation repair contractor to conduct Foundation Inspections or reinforce your foundation. A new garage door installation can also boost the value of your home as well as its curb appeal.
CONSIDER HIDDEN FACTORS
It’s not just what’s on the outside that counts – you must also take a good look at the inside of your property to determine its true value.
“When you come to sell your home, hidden issues – such as a broken boiler, leaks, damps, plumbing issues etc. – will be spotted during the survey stage, and could quickly decrease the value of your home or deter potential buyers.” So Elliot encourages us to always be one step ahead by regularly checking for problems and making sure that they are corrected before you put the flat on the market or accept an offer.
“If you have the time and money, giving your home a facelift by making improvements – such as a fresh lick of paint, creating more storage space, renovating the garden, or freshening up the bathroom – could help to increase its value. It may seem like an unnecessary chore and expense at first, but it will help to make you more money when it comes to selling.”
EMPLOY THE RIGHT EXPERT
So once we have brushed up on our knowledge of the property and the local market, how can we use this expertise to ensure that we are employing the right expert to help sell the property?
“If you are looking to sell your property through an Estate Agent, it’s important to obtain four or five valuations from different estate agents to ensure that you are receiving similar valuations.” Says Elliot. “If they differ, use your own knowledge of the property to work out which is the most accurate price and go with that estate agent. Don’t be sucked in by the highest valuation, as this is not always correct and you will end up being disappointed in the long run.”
And he is right, but it can be tricky if you are afraid to challenge the Estate Agents, which Elliot has realised also but recommends to ask the Estate Agent to back up their valuations to give examples of previous properties they have sold recently that are similar to yours – you will then get a good idea of who has given you a fair estimate.
And if you are looking to sell your property quickly?
“If you are looking for a quick sell, you may opt to sell through a private home-buying company such as We Buy Any Home. In the first instance, we will provide an initial quote over the phone based on the property details collected on the call and market data from around the local area. Then we will instruct two local independent estate agents to determine a more accurate value of the property to ensure that they home owners are quoted a fair sale price. Following this, we provide you with an initial offer within 24 hours of contact – enabling completion on a house sale in as little as seven days.”
Thank you Elliot, and thanks to We Buy Any Home, the UK’s number one home buying service, for these expert advice – we now know everything there is to know about how to price a property and, thus, avoid an inaccurate valuation.
Visit the team at www.webuyanyhome.com for more details!