Do not Just Rely On the Word of an Estate Agent
When estate agents come to value your property there’s more going on than you may first realise.
For example, did you know that estate agents don’t actually perform “property valuations”?
All an estate agent does is provide an “informal opinion” on what a property might sell for.
“Informal opinion” means that there’s no requirement in law for their opinion for being accurate.
When you blindly put your faith in an agent’s “informal opinion” the possibilities are you’ll be taken advantage of.
This is because agents are known to over or undervalue property for their gain. Here’s why:
1. They overvalue because it’s the easiest method to win new business.
Most potential vendors react favourably when an agent flatters them with an inflated opinion of what their property is worth.
The problem is that when you’re locked into a contractual relationship, a price reduction would be the only way to attract any serious buyers.
Because this “false start” has already alienated a lot of buyers, you’ll be in real danger of selling for less than you deserve.
2. They undervalue so property sells quickly. This allows them to collect their commission cheques faster.
3. Additionally they undervalue for personal profit. Property traders often offer bribes to agents in order to help them get their hands on property at knockdown prices.
Many people are vaguely aware that these kinds of things go on however, few appreciate just how widespread the problem is.
If you would like proof and to learn more, a full discussion about why you mustn’t ever trust an estate agent’s valuation can be found by clicking the link below:
* Property Valuation, Estate Agents & Lies!
The Truth About What Your Property is Worth
Before I demonstrate how to protect yourself against an inaccurate property valuation, I’d prefer to quickly highlight the commonly held misconceptions lots of people have regarding their properties true worth.
What your property is worth (i.e. what it will sell for) has NOTHING to do with:
1. Just how much you paid for it.
2. The amount of money you’ve spent on it over the years.
3. The amount you want to sell it for.
Instead, you would be wise to concentrate on this one truth:
“Your property is worth what a buyer is willing to pay for it” (just so long as the buyer’s mortgage lender agrees that the price is fair).
Consequently, what a buyer (and their mortgage lender) will decide is a fair price is determined by looking at:
1. The purchase price similar property to yours has recently sold for.
2. The price similar property to yours is currently being advertised at.
You observe, property valuation is actually a guessing game and no matter what anyone tells you, the facts is – until your property is sold nobody can guarantee what price you’ll achieve.
The best anyone can do, is use the information available and take an informed guess about what homebuyers might be willing to pay.
The 2 Steps to Valuing Your Property
The best way protect yourself against an inaccurate valuation is to form your opinion of what your property is worth, and to do this before you approach any agents.
Step One – Look at What’s Sold Recently
First discover what property like yours (in the local area) has recently sold for….
You do that by considering data collected by Land Registry.
The Land Registry is really a government department that (amongst other things) records the effects of all residential property sales.
Their data allows you to discover the particular price someone paid for any residential property sold in England & Wales since April 2000.
Unfortunately, the Land Registry only makes house prices available 3 months after the sale has taken place, thus the knowledge dates quickly.
Because of this, only sales that took place within the last 6 months are of any use to you. The remaining you can ignore.
Lots of websites give direct & free access to the Land Registry Data however, I think one of the best one is the Zoopla:
* Zoopla Online Property Valuation Tool Review
Step Two – Take a look at What’s Selling Now
Next discover what prices similar property to yours (in your area) are currently being advertised at.
Because it has the largest number of property adverts, the best place to look is:
Rightmove.co.uk
A good tip is always to imagine you’re buying your home all over again and see which properties catch your eye.
Because Rightmove (like all property portals) makes it really easy for buyers to spot a property that’s overpriced, it’s vital that yours is priced competitively.
Overpriced properties won’t attract serious buyers.
That is why it’s so important to keep an eye on your competition and have a good grip on what price range buyers would expect your property to be in.
Print off the details to the 5 properties you feel are most like yours.
You should study them carefully, having a critical and unbiased eye and decide why buyers would pay more or less for your property.
How to Realistically Compare Your Property
to the Competition
Listed here are the reasons a buyer would pay more for the property (that at first glance looks just like yours):
* It’s in a better location
* There are garage or off-street parking
* There are private outdoor space (especially if it’s a big south-facing garden)
* Has an en-suite bathroom
* Has double bedrooms (min size 2.7 x 2.7m)
* Includes a conservatory that blends with the existing building
* Has a bigger internal square footage
* Detached is better than Semi-Detached which is better than End of Terrace, which is better than Mid-Terraced.
* Has newly fitted bathrooms or kitchens
* Has a large kitchen you can eat in
* Is newly decorated throughout tastefully
* Has period features
* Is well maintained
* Has double glazing that compliments the design of the house (e.g. Not UPV for a period property)
* Has an alarm system
* The property is Freehold
* Has a healthy amount of time left on the lease (more than 60 years)
* Includes a superior outlook (i.e. Over green space versus a road, railway or eye-sore)
You don’t need to know exactly just how much extra value any of these things would add.
You simply have to be critical, objective & realistic about why your competition could command higher or lower price tag than your own property.
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As long as you’ve checked out the right information sources, your opinion might be robust & it will be very difficult for just about any estate agents to pull the wool over your eyes.
Useful Links Contained In This Guide:
Property Portal (UK’s largest):
Rightmove
House Prices (free to use – highly recommended):
* Zoopla – Property Valuation Tool
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