Are you a little bit confused about the value of your home? Maybe you've invited a few local estate agents out and their valuations have varied hugely. Or perhaps you have used an online valuation tool and there is a massive variation in the minimum and maximum value it has given you. You are not alone, we often speak to clients who have previously had such a variation in an estimated value for their home. To obtain a value, most homeowners will usually call out a handful of estate agents to find out their thoughts. There can often be a large variation in the values given by each agent. This can be a little frustrating. On one hand the higher valuation is very appealing and the agent seems very confident they can achieve it, but is it realistic? On the other do you risk not getting as much as you could do if you go with the lower valuation? It is so important to market your home at the right price, right from the start. A home that is overvalued is at risk of lingering on the market with the high price tag putting viewers off. This can lead to the price being reduced over and over to try to try to attract attention, but can have the opposite effect. Whilst it may attract attention it can often be for the wrong reasons. Buyers become wary, they question why it has being reduced. Is there something wrong with the house? Why hasn’t someone else snapped it up? We know that the longer a house is up for sale, the lower the offer eventually accepted. No matter how dazzled you are by those pound signs, it is far better to price your home at a realistic value from the very beginning. So, why does variation in value happen? Unique homes: This is especially common when agents value a unique home. One a little out of the ordinary. One where there is not much else around that compares. Estate agents use comparable data on sold prices and look at what is currently on the market to help them arrive at a figure. When you have a house that is unique, perhaps one that is rural, a listed property or one with oodles of character there isn’t usually much around ‘similar’ to compare with, it can throw some agents and lead to a variation of estimated value. Deliberate overvaluation An agent who is keen to win your instruction (especially one that will achieve a financial bonus as a result) may put forward an inflated value. Their thoughts being that they will impress you with this higher value and you are more likely to choose them. Unless they have the figures to back this up their valuation be wary. Always question how they have come to the figure they have put forward. What facts is it based on? What has sold in the area for that value and how does it compare to your home? Many homeowners will of course take this price at face value, after all, the agent is the expert. They instruct the agent. Four weeks down the line the agent is calling asking them to reduce the price. Time and time again we have seen sellers left frustrated and feeling let down by their estate agent. It is natural to want to achieve the highest price for your home, but if you suspect overvaluing, dig a bit deeper into the agency's own business figures. Ask the agent - what percentage of homes that they are selling have been reduced in price. Ask them what is the number of reductions a home with them on average experiences. Also ask them what percentage of homes they sell achieve their full original asking price (not the reduced price). With these figures you can see if an estate agency has a tendency to take on homes at a higher value and then go on to reduce them. It will also show you if they regularly achieve the original full asking price. If not then it would suggest their original values are over-inflated. As a guide, the national average a home achieves in the UK is 97% of their asking price. Anything below this is below industry standard. Online valuation tools Online valuation tools are becoming increasingly popular. Many agents host a version on their websites as do other popular sites such as Zoopla. They tend to give you a minimum value, mid-range value and maximum value for your home. They use data from the Land Registry and sold prices to derive at a value within seconds of you typing in the information about your home. These tools are great if you have a house that is easy to compare or similar to others in the area. However, if you have a home that is a little out of the ordinary then the value can be widely out. Often giving you hundreds of thousands of pounds variation in the minimum to maximum value. Take the value with a big pinch of salt. Whilst sometimes they can be a good guide they are not 100% reliable. Here at Alexander Gibson have a more detailed and reliable option on our website. Fill in the form online and we will look at the comparable data for you. We do not rely on an automated tool to do this like some online valuations. One of our agents will look at the data and email you through an estimated value. Here you will have a much more solid valuation than an automated tool that arrives at a valuation in seconds. To find out your home's value online go to http://www.alexandergibson.co.uk/content/quick-online-estimate Getting your price right, right from the start The first month that your property is up for sale is the most critical. A new property on the market will get the most interest. This time period is your golden opportunity to attract a buyer. If you price too high you risk missing this chance, risking your home becoming stagnant. Buyers have access to all kinds of information that allows them to form an opinion on your price. They can look at sold prices in the area and they can also compare your home to other houses that are currently up for sale. A well-informed buyer can have a good go at estimating a home’s value and if your home is priced too high they will use this information against the value. It is far better to price correctly so you, your agent and your buyer are confident in your asking price. How to achieve an accurate value Firstly, do your research. Have a look online at sold prices in your area, you can do this through Rightmove. Next, look at your competition, what other houses are up for sale in your area and how do they compare to yours? Rightmove and Onthemarket are great websites for doing this. A seller can usually form an estimated value from doing this. Secondly, run an online valuation. How does this compare to the figure you have in your head? Is it similar? Finally, invite three agents out to talk about the value of your home. Take an average of the figures. How does it compare to your researched price? Ask the agent how they came to their valuation. The agent should be able to walk you through exactly how and why they value your home at a certain price. Of course, if you do have a unique home this can be a lot harder as there won’t be as much data out there for you to base a valuation on. It is especially important to listen to what each agent says in this instance. Listen to the agents reasoning. Go with what makes sense and your gut instinct. Agents of course are only human. If their values are hugely varied, it would be advisable to take an average of the figures put forward. Here at Alexander Gibson we are experts at valuing unique homes. We pride ourselves in the research and experience we put in behind each valuation. If you have had a value for your home that you are unsure about, give us a ring, we would be happy to take a look at the figures for you and offer you some free guidance. Call us on 01423 563077, email talk@alexandergibson.co.uk or visit our website at www.alexandergibson.co.uk
