House valuations are the crucial first step to selling your house.
Estate agents are typically very experienced at carrying out property valuations, which they often do for free.
They do them regularly and usually know the local market well.
So, what exactly are these factors that determine the value of the home?
How does an estate agent value your home?
Almost every estate agent needs to visit your property in-person before they can reach a definitive valuation.
They will arrange a date and time to come along. During this visit, they will inspect your entire house so they have a clear understanding of what features it does (and doesn’t) have.
To reach a definitive figure, an estate agent will consider the following:
The current market
A house’s value is significantly impacted by the current national and local property market conditions.
If the economy is going through a recession, then most people have less cash readily available. This will likely negatively impact the amount of money potential buyers are willing to spend on a house.
Likewise, if interest rates are hiked up by the Bank of England, then this can reduce the affordability of a mortgage, too. These considerations can decrease the current value of your house.
On the other hand, if the economy is booming, then people have more money to spend, and this may increase your property’s value.
If there are lots of people who are looking to move into the local area, then this will increase your valuation too, because people are willing to pay more to move there.
They can also advise on the best time to sell a house. This includes which season or month will most likely give you the best and fastest sale.
What similar properties in the area have sold for
An estate agent from a local business should have an excellent perspective on how much properties are selling for in the area.
Since they are dealing with multiple transactions every week, they can use similar deals in recent months as a reference point for your house.
For example, imagine you are selling a 3-bedroom detached house. If the estate agent has recently sold a similar property nearby, they will be able to recommend an optimal asking price.
Any potential buyers they have ‘on their books’
Many estate agents have a database of people who are currently looking to purchase a property.
This might include individuals who have recently attended a viewing in the local area, or people who are keen to sell their house but have not yet found a new place to move to.
In this instance, the estate agent is able to contact these people and find out if they would be interested in your property.
They can also gauge the budget of these people, and how much they would be willing to spend on a property like yours, to inform their valuation.
Potential future problems
An estate agent’s property expertise can give them a perspective on potential future problems which you (the homeowner) may not know about.
For example, if there is due to be new developments on your street in the forthcoming months which could increase light or noise pollution, then this would probably decrease the value of your home.
As another example, aproperty is near a school that is due to have a poor Oftsted report soon will likely soon lose value.
Can I get a valuation completed online?
While most high-street estate agents prefer to visit your house in-person to complete a valuation, it is possible to get your property valued online. This is especially common if you choose to sell your house online.
Online valuations use much of the same information that is listed in the section above. The price of similar houses nearby, the market conditions, and the size of your property can all be determined through online data.
You should remember that each online valuation tool can give you a different figure, just like separate estate agents can visit your house and reach a different conclusion on its value.
These days, online valuations are reliable – but like with all valuations (in-person or not) you should take each one with a pinch of salt and ask multiple sources for a figure to get a clear sense of the average.
Will an estate agent exaggerate a property’s value?
Some people hold the opinion that estate agents often inflate a property’s value, so the homeowner looks more favourably upon them compared to other agencies.
They do this to increase the likelihood the sellers choose them. Inevitably, this value will have to come down once offers do not come in at this increased price.
The regularity of this taking place varies for each town, company and individual estate agent. Many are hugely reliable and will not exaggerate your property’s value at all, while others (like in any industry) may be slightly more lenient.
This makes it increasingly important that you get multiple different valuations, rather than relying on just one, as this will reassure you that the figure you’ve been quoted is accurate.
