How do estate agents value your home?

After deciding to sell, estate agents need to value your home before putting it on the market. Many buyers and sellers wonder how values are reached.
The first thing to say is that you should speak to an estate agent with local experience. If you’re selling in Washington or Birtley, for example, we are perfectly placed to help.
We have lots of experience and knowledge of the area, so can value your property accurately. Using an agent from outside the area could mean your home is under-valued. Worse still, if it’s over-valued you may struggle to sell.
Valuing a house is about more than just numbers. So how do we reach a fair value?

 

Historic data

The first thing we look at is historical data of prices of similar properties. We have access to our own as well as external information.

It is easier to find data on some houses than others. Fatfield, for example, has houses that are similar so it is easy to find statistics. But if your house is a one-off, then we have to dig deeper.

 

The data we look at includes:

 

• Sold prices. We check the sale of comparable homes sold in the past three to six months. Sometimes we have to look back further, then work out the value on average price increases. We check data from Land Registry as well as our own information.
• Current market prices. We look at similar homes for sale and consider how long they have been on the market; the current asking price and whether the price has been reduced.

We expect to agree a sale within 5% of the asking price. The longer a property is on the market the less likely it is to achieve its original asking price.

Price per square foot

Although this isn’t a common valuation tool, it is valuable to estate agents. It is a value ‘on paper’ but isn’t always used in valuation as other factors affect the value.

We’ve all heard the phrase, ‘location, location, location’! Well, that affects the value! An average home in a stunning location with access to amazing amenities will be more valuable. That’s how an identical house on new-build developments several miles apart can fetch different prices.

 

Local amenities

As we have mentioned, amenities affect property values. If it is close to good schools, great parks and a nice walk from good restaurants, then it is more desirable. Some people talk about the ‘Waitrose effect’, which basically means if your home is near premium brands the value will be higher. Transport connections can also make a difference.

 

The setting

Where the property is situated affects the value, too. If your views are jaw-dropping and you can’t hear a road, then it matters. Buyers are willing to pay more for a stunning view. It’s the difference between the price of a country house hotel room and one on an industrial estate. Location makes them more valuable!

Where your garden is situated can also make a difference to your valuation. A south-facing outdoor area is worth more to buyers because they can get out into the evening sunshine. If it’s facing north, it won’t get as much sunlight.

 

Aesthetics

First impressions matter! If you walk up to a property whose garden is over-grown and the windows never cleaned, the valuation maybe lower. Buyers don’t mind putting their own stamp on a property, but major works will need funding. As a result, this needs to be factored into the valuation. If a house has been well kept and updated, it is valuable!

 

Once we consider the data, appearance, location, neighbourhood and potential, we can then arrive at a valuation. As you can see, it’s more than just numbers!

If choosing an agent, don’t rush to instruct the one offering the highest valuation. If it is widely different to others, that maybe because they lack experience of the area. Look at the complete service, not just the price!

We have lots of experience in our area, such as Washington, Chester-le-Street and Houghton. If you need a valuation, contact us today.