Valuing your Property
Before you invite an estate agent to value your property you must first establish what it is worth. This may seem like a contradiction in terms but the fact is that estate agents' valuations are often inaccurate. This can happen for a number of reasons:
1. Deliberate over-valuation - some estate agents give deliberately over-optimistic valuations because they know that it will help them to get more properties onto their books.
2. Poor research - an estate agent should have up-to-date knowledge about the prices achieved for other properties in the area which have recently sold. Poor research is a very common reason for an inaccurate valuation.
3. Inexperience - too many firms of estate agents send staff out on valuation appointments who do not have sufficient experience to value accurately.
4. Poor local knowledge - even an experienced estate agent will not be able to value a property accurately until he has been working in the local area for several months.
The only way to protect yourself against the consequences of an inaccurate valuation is to undertake comprehensive price research on your own behalf. In some countries the actual selling price achieved in every property transaction is a matter of public record. In the UK this information is often not publicly available and a degree of subterfuge may be required to obtain the necessary background information.
If you have not already done so, you should reconsider the idea of registering with some of the local agents as a buyer in order to obtain a selection of sales particulars of properties that are similar to your own. If you really do not wish to undertake this type of research, an alternative would be to look through back issues of the local property newspaper to find similar properties (back issues of the local papers are available from the library). The more properties you can find, the more likely it is that your personal valuation will be accurate.
Using the Information to Determine Property Price
The value of a property is determined by two factors: the prices achieved for similar properties that have recently been sold, and the asking prices of properties that are currently on the market and are competing for the same buyers as your own.
It is relatively easy to establish the value of a house in a road when there are other similar properties. The typical process would be:
Step 1 Research the asking prices of the last five or six properties in the road that have been offered for sale.
Step 2 Ignore properties which were markedly cheaper or more expensive than the others (there is always a reason).
Step 3 Average the price of the remaining properties.
Step 4 Deduct 5% from the final price to allow for the average difference between the asking and selling prices.
