I wanted to show you three ways to value your property. This is ideal if you’re looking to buy a property as an investment, but it’s also worthwhile taking these into account when you’re looking to sell or purchase a property for yourself.
You shouldn’t always rely on an appraisal from an Estate Agent; they’re great for giving you an overall valuation but they are only providing you one third of the overall valuation and there are other things you should take into account.
Why should you value your property in 3 ways? Because first of all, it’s going to give you a better forecast for your investment and it also enables you to look to the future of what that property could be worth in 6 months once the sale has completed, works have been carried out and it’s tenanted.
And because you know what the end value is going to be; it also reduces your risk. It gives you that accuracy for you to see that the money you’re spending out is worth it. There will always be a human element to it but overall, it needs to be a logical calculation to demonstrate the right return for you.
As I’ve already mentioned; the most obvious way of valuing a property is to get an Estate Agent to take a look.
As an estate agent myself, I probably shouldn’t be sharing this but you should not solely rely on an Estate Agent for a valuation. Yes, take it into account, but do not rely on it. And here’s why; thy agent will always value the property optimistically to sell you the dream. You are likely aware that the listing price is different to the proposed selling price.
An estate agent is a market appraiser. They can only technically tell you about the market and how that is performing and the valuation is based on the market at that current time. So whilst what they will give you will be useful and should be taken into account – it shouldn’t necessarily be relied upon.
You need to get three Estate Agent valuations on your property.
- One will give you a purely factual estimation based on the market
- The second will do the same but they’ll add an element of optimism to the valuation
- The third is going to blow them out of the water; they are going to tell you that your property is better than all of the others and they will inevitably push up the valuation price in order to get the listing.
Did you know that you can are your agent to show their research? You can ask them to show you all of the sold properties to how you all of the completed sales, and to show you the average asking price compared to the original listing price. They have access to all of the information and you can ask to see it.
The next way of valuing a property is through a chartered surveyor. Now you will have to pay for this valuation but it is worth it; chartered surveyors have trained for years and will have done a lot of work to get to that status.
Chartered surveyors are governed by the RICS so they are required to evidence their valuations. They also work primarily with the mortgage lenders so their responsibility is to demonstrate the true value for finance lending.
So why is this one important? The surveyors report is 100% factual. They work based on what is sold, what has completed and also what the condition of the property is. This will give you your lowest price.
The third valuation is one you can do yourself.
Go on to Rightmove and have a look at the sold properties that are the same or similar to yours and see what you could be looking at.
Something to remember here is that you need to take into account that if a property is listed on the Land Registry as completed within the last month; on average this will mean that the property went on the market originally 6 months ago.
The average time on the market for a property is 81 days. You’ll get varying stories from different agents but in the UK – the average across the board is 81 days. And then you take into account that a sale will typically take 3 months to go through. This means that the prices you’re seeing on the Land Registry are around 6 months old. How relative is that to the prices now? Do your research. What has the market done in the last 6 months?
So once you’ve got these 3 valuations; you then need to understand – where do you want your property to come in pricing? Do you want to be at the lower end of the spectrum, or the higher end? Work out what your target price is and what your our price is (more on this over on the Making Your Money Work For You article.
I hope this helps. And I’m always happy to go through this with you to make sure you’re getting the best deal. To find out more about this, watch the video here, or listen to the Podcast which will be available from 29th July 2020!