What’s the market value of my house?08/06/20
When you decide to put your house up for sale, one of the first things most people do is to get in touch with an estate agent who will come out and provide a valuation figure so you know what to set as an asking price.
It’s important to remember that something is only really worth what someone else is prepared to pay for it. Many people get confused as to why different estate agents come out and give different valuation figures. The RICS definition of market value is as follows:
“The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.”
What impacts the market value of your home?
A number of factors influence the market value of your home. These include its age and size, how many bedrooms it has, its structural condition, the size of garden, available parking, extra features like a conservatory and its location. For some buyers, your house being in the catchment area of a good school will make it very desirable. For others, good local transport links may be key.
If you are selling a house, choosing a sensible asking price is critical. That price will be set within a range of values. The cheaper the house, the smaller the range. As values increase, this range will increase. An estate agent’s role is to understand the local market. You will need to give them some guidance as to how quickly you need to move. If a quick sale is needed, then it makes sense to pitch it towards the lower end.
Why can over pricing your house be a false economy?
You may be tempted to over price a house, to maximise the amount of money you can make on the sale. This can considerably lengthen the time you wait to receive an offer. If you get an offer above the recommended asking price, you may run into complications further down the line. For example, a surveyor valuing the house for mortgage purposes will generally approach the task with a prudent mind set. If the gap between the offer price and the mortgage valuation is large this can seriously unsettle a buyer and jeopardise the sale.
Be guided by the professionals and remember to get more than one opinion when it comes to setting the asking price of your home. For professional advice, get in touch with the Forge team.