Tips Guides Resources

The property valuation process is a key ingredient whenever buying or selling real estate assets. The seller understandably wants to make the most of their home and receive the best valuation figure, in a similar vein, buyers want the opposite outcome. It is hoped that the following information will set out the importance of this process and how homeowners can find the best figures.

In the real world it is a commonly understood belief that a property is only ever worth what a buyer is willing to pay for it. This does not mean however that the valuation process is defunct; it is still needed for both parties to reach a common figure. In the majority of cases valuations are carried out by three different services; estate agents, qualified surveyors and automatic valuation models or AVMs. None of these services offer a one hundred percent guarantee of the figure however, even the surveyor who is the most qualified has limitations due to the element of estimation in the process.

These three parties though all undergo the same process when valuing a property; the accuracy of this process however can vary greatly. Ultimately no matter how many valuations are made, it does not detract from the fact that when it comes to the eventual sale of a house or flat, the buyer holds all the cards on how much they are willing to pay. The process is a fine balance between hard facts and estimation, only the most skilled of operators can find this balance effectively.

The first and major concern involved in the valuation process is the condition of a property, for instance a home that has a roof missing tiles or windows hanging from their frames is likely to be worth a great deal less that one in pristine condition. Additionally homes that have been extended are likely to be worth more as the layout is greater and hence the floor space is more considerable; that said a consideration of the quality of workmanship will normally be made, a shanty bolted to the side of a house is unlikely to increase its value. After the condition of the property is considered there are other, more abstract considerations to be made, these consist of the overall state of the market and the prices of similar properties in the local area. Once these three factors are combined it is possible to make an accurate valuation.

The accuracy is naturally of vital importance in the process. If a home is undervalued it is likely to sell quicker although the price received could lose the homeowner thousands. Understandably all homeowners want to receive the best price for their property although care should be taken not to overvalue, while more money may eventually be a possibility, the time it takes to sale could be extremely long, forcing a drop in the price anyway; especially if desperations seeps into homeowner’s mind.

For those who are simply trying to find a ballpark figure for their home the use of an AVM can be beneficial. In most cases these are online and require the homeowner to enter certain details onto a website in order for a system to crunch the numbers and find a decent figure. The accuracy of these systems however is always questionable and it is only through the obtaining of a variety of valuations that a valid average figure can be produced.

Hopefully this article has provided homeowners with essential information on the types of valuing services out there and how sellers must approach the issue of finding a suitable, yet attractive asking price.

Real estate expert Thomas Pretty looks at the importance of the property valuation process and how sellers can make the of their homes.