Valuation is an Art Form

For the last couple of decades, dinner party conversations have been similar all over the land, “bought the old place, slammed in a new designer bathroom, modernised the kitchen added a steam room, AND we practically doubled the value of the place!”

We are literally obsessed with all matters pertaining to property.
>In reality our property is only worth what someone is actually prepared to pay for it at the time of selling.

Accurately estimating property values is a factor relied upon within the overall economic spectrum; it oils the wheels of the homebuying industry. A large proportion of our assets are tied up in property, a sound valuation is linked to the credibility of our whole financial system.

Many of us laymen don’t know the difference between a market appraisal given by an estate agent and a formal valuation, undertaken by a surveyor.
Estate agents by their very nature tend to be optimistic on what they hope to achieve and this is factored into the asking price. It could be that you are given an inflated attractive price for your property in the hope that you will instruct them in your sale.

Formal valuations are mainly used by banks and building societies before lending money. It is usual for them to find ‘comparables’-similar properties within the same area that have sold within a six month period, this gives them an idea of proper value.

In reality both estate Agents and surveyors rely on local market knowledge, such as the best locations, where people are actually wanting to live (up and coming areas) You can’t be too prescriptive, the surrounding evidence needs to be looked at, then an estimated valuation can be given. Valuation it could be argued is an art form rather than an exact science.

When selling a property it is the norm to have three estate agents view your property and give their valuations. These can vary somewhat, quite considerably sometimes. It may seem tempting to go with the highest valuation, but a word of caution if you do, it may mean that by being overpriced you miss out on potential buyers.

Equally if you are a purchaser you will not like to feel that you are paying well over the odds for that property. Lenders will often require a valuation, this can occasionally be no more than an external viewing.
Properties valued at a million plus are more likely to commission their own valuation.

If you are a buyer or seller there is a fair amount of research that can be undertaken by you as to the value of your home. The Land Registry’s database has property sales on it, look for comparables. Look out for a recommended Estate Agent, word of mouth is key, do their properties sell? Do they sell within a reasonable timescale? Check with your neighbours who may be selling.

Remember that alterations can greatly improve and indeed add value to your property, but overdoing it can be a total waste of your finances. No matter what you do to your three bedroom semi, and the vast amount of money that may be spent, there is generally a ceiling value for a particular type of property in a given area.

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