Piggybank News

January 13, 2011

How much is your house worth?

The first thing to realise about valuation is that there is a difference between list price and sales price. The list price is usually the stated price of a piece of property and is really just an estimate of what the homeowner is hoping to sell the house for. This is the price which you will see houses listed at on the internet and in Estate Agents windows.  The sale price means the price that the house truly sells at. Several factors, such as market conditions, condition of the property and even the owner’s situation will affect how closely the list price is reflected in the final sales price. An accurate valuation based on the sales prices of similar properties to your own is very often the key to a successful sale.

So how do you go about getting a realistic valuation?

Valuing property is not an exact science and many factors are taken into consideration. Agents don’t charge for valuations, so try to get 3 as a minimum. However it is important to realise that the estate agent will, quite rightly, factor in a degree of optimism about the property. It is very difficult for an estate agent to raise the price of a property once on the market, much simpler to reduce it. Also, estate agents need to factor in possible value growth whilst a property is being marketed. Finally, most buyers expect to haggle and offer under the asking price, usually agreeing a figure less than the asking price. For all these reasons an estate agents asking price will usually be greater than open market value.

Once you’ve got some Estate Agents valuations, research the market yourself for similar properties nearby, either through agent windows, local property supplements or property websites and find out what price they are on at. If a similar house to yours in your street is on at £350,000, marketing yours at £345,950 (for example) might well get you more viewers and a quicker sale.

Also, ask your solicitor to fully explain all costs associated with selling and find out from your mortgage lender whether you will be hit with any redemption penalties. Then you’ll know at what price you can afford to sell.

It is important to remember that your home must really be priced based on the market conditions as they now stand. The housing market is constantly in flux and this flux has a direct effect on the value of property, so you must use the most up to date information you can get hold of.  The best way to get a feel for the true value of your house is to find out the actual selling prices of properties similar to yours in your area.

Piggy says “One of the best ways to establish current market value is to ask for a Hometrack valuation reportHometrack have been compiling information from the Land Registry records for the last ten years and a valuation report created using their service will give you vital information about the local property market as well as a list of the actual sold prices for similar properties in your local area.  Hometrack is an independent information service and it is the system most commonly used by mortgage lenders and surveyors to value property for lending purposes.  These report usually cost £19.95 but readers of Piggybank News can request a FREE Hometrack valuation report at http://www.miltonkeynespropertypartners.com/go

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