If you’re looking to sell or rent your home, or need to know the value of a property for other reasons, you should turn to an expert for the most accurate figure. Many people opt for an estate agent to assess the value of their property, but is this the best approach?
Property Saviour explores the accuracy of estate agent valuations. We’ll discuss how to get the most realistic figure and the main difference between a professional (RICS) and estate agency valuation.
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The Accuracy of Estate Agent Property Valuations
Estate agents are usually the go-to option for both residential and commercial property valuations.
But how accurate are they?
Generally, a well-experienced and established estate agent will be able to give a fairly accurate valuation of your property. After all, their success is largely dependent on their ability to sell. An inaccurate valuation may be an obstacle.
If a house is valued too highly, it could easily deter buyers. This will often result in the property staying on the market for longer than necessary, costing the agency more time and money.
On the other hand, if a property is valued too low, it may sell faster. But this could also lead buyers to be suspicious, as they may think there is something wrong with it. This can be very frustrating for sellers who receive a low valuation.
In addition, estate agents receive most of their income through commissions. This means that if a property sells for a lower price, they will earn less. They must also consider their reputation.
This can be discouraging for agencies if they are tempted to undervalue a house for a quicker sale. However, this could create another problem…
Estate Agency Over Valuations to Win Business
An estate agent may give a property a falsely inflated value to earn more commission. However, experienced agents understand that this rarely works.
Most homebuyers are well-informed and can do their research. There are now many websites that provide an accurate idea of a property’s value. So, it is important to be aware of this practice and make sure to do your due diligence.
Nevertheless, some agencies may still try to increase the estimated value of the property to get the best possible price. Therefore, this is something to watch out for.
How Much Do Estate Agent Valuations Cost?
Yes, estate agent valuations are free. If you are looking to sell your property through an estate agency, they can provide a valuation as part of their services. However, you will have to pay a fee once the sale is finalized.
You can get in touch with multiple estate agents to compare their valuations and determine which one is the best for you.
How Do Professional Property Valuations Work?
Professional valuations conducted by an accredited surveyor from the Royal Institute of Chartered Surveyors (RICS) are often formal or professional.
To complete such a valuation, surveyors must assess the condition of the interior and exterior of the property. This includes inspecting the brickwork, guttering, fascias, soffits, windows, doors, gas, electric fittings, and other components.
Additionally, surveyors take a look at the structure of the property and the local area to assess the risk of flooding or other issues. They also examine the sale prices of similar nearby properties to reach a figure.
Surveyors have a legal responsibility to be accurate. They are responsible to RICS, a professional body founded in 1868, and can lose their license to practice or face potential lawsuits if they are found to be over- or under-valuing.
Getting Estate Agent and Formal Property Valuations
So, how much do independent property valuations cost? This depends on a variety of factors, such as the surveyor you choose, and the size and type of property you own. Generally, a RICS certified surveyor may charge between £150 and £800 for their service.
This usually depends on how much detail is required and the location of the property.
Alternatively, you could use free online property valuations. However, these are only estimations and may not be as accurate, as they don’t include a detailed survey.
How Many Property Valuations Should I Get?
It is best to avoid getting caught up in getting too many appraisals, as it can be easy to overanalyze the situation. It is ideal to get two or three opinions, then calculate the average and stick with that.
Some sellers just opt for one appraisal, especially if it is a referral or the agency has a good reputation.
How Long are Property Valuations Valid For?
Most valuations are valid for one to six months. To sum up, estate agents are a great source of information but it is advisable to get a few other opinions. Don’t forget to double-check the numbers you are given by doing your research.
How an estate agent puts a valuation together
An estate agent will use various factors to put together a valuation of your property. This includes:
- Carrying out research in your area;
- Understanding what other properties have sold for in the vicinity;
- Detailing the local amenities and schools;
- Measuring each room.
All this information is then used to come up with an estimated value. But keep in mind, no two homes are the same and may not receive the same price. It also depends on the opinion of the agent, as well as their experience, especially if they have recently sold a similar property.
The agent will also consider the property’s unique characteristics, its precise location, and nearby amenities. It’s worth noting that being close to a good school can increase the price of the property.
Issues with an estate agent’s valuation
When it comes to estate agents’ valuations, there is the potential for a discrepancy when a mortgage lender sends a surveyor to determine the property’s worth to them.
This is because the surveyor will apply stricter criteria when assessing the value and will examine the property in more detail than an estate agent would.
The surveyor’s valuation may reveal issues such as dampness and suggest that the property is not worth the asking price, potentially leading to the seller having to reduce the value. To get the most out of estate agent valuations, here are some tips:
- Get at least three from different agents, including one from an online-only estate agent;
- Don’t automatically go with the highest valuation;
- Consider the commission rate and promotion the agent offers as well as the price;
- Be aware that the estate agent’s job is to get the best possible value for your home, but there is the risk that the home will be overpriced compared to similar properties in the area.
It’s a good idea for the home seller to research to find out what similar homes in the area have been sold for. This will give you a good idea of what your property’s market price should be.
Property experts suggest not being afraid to challenge the estate agent’s valuation and ask them to provide proof of how they arrived at it.
The agent should be able to give examples of properties they’ve sold that are similar to yours, which can also give you a good idea of your home’s selling price.
You can also reject the estate agent’s valuation and ask for your home to be marketed at a higher price. This can be a good tactic for those who are willing to negotiate, as some buyers may demand a discount.
Should you get more than one house valuation?
Home sellers should always get more than one house valuation, as this will give them a better understanding of the value of their property and what potential buyers might be willing to offer.
It is customary to request the services of three different estate agencies. However, it is perfectly acceptable to ask as many agencies as desired.
Additionally, it may be beneficial to enlist the help of an online estate agent, as they provide an all-inclusive package for selling homes and are usually keen to facilitate a quick sale.
Are estate agent valuations accurate?
Estate agents are professionals, so you can usually expect an accurate valuation from them. However, since they are in business, they will want to make as much money as possible from the sale of your house, and could potentially overprice it.
Local estate agents will have a good understanding of what similar properties are selling for in the area, as well as an idea of the demand for your home. This knowledge can be used to price your property accurately, to attract a buyer.
This is significantly different to a surveyor valuing your property for a mortgage lender; they will take a more in-depth look at what the property is worth if the buyer is unable to repay their mortgage.
Do estate agents overvalue properties?
Some homebuyers may view estate agents as overpricing properties, but this is done on behalf of the client to find the price the market is willing to pay.
Whether it is overvalued can be debated, as if the property sells then it was priced correctly. An agent may also overprice a property to gain the seller’s business. If buyers aren’t found within the following months, the house’s price may be reduced.
How do I know if my house is worth the asking price?
If you’re uncertain of the value of your home compared to the asking price suggested by an agent, you can do some research to determine the prices of similar homes in your area.
This will tell you if the buyer paid the asking price. If your research indicates that your asking price is in line with the current market value, then an expert would likely agree that it is a fair price.
Estate agent valuation and surveyor valuation
Estate agent valuations and surveyor valuations can both be used to determine the worth of a property.
Estate agents use their expertise and local knowledge to evaluate a home, while a surveyor, working to an RICS standard, is there to ensure that the buyer is getting a property worth what the market says it is and that the mortgage lender is protected if payments are not made.
For some sellers, it may be wise to have a surveyor value their property. This process will identify any potential issues that may need to be addressed, which could save the seller from having to negotiate on price with the buyer to cover the cost of repairs.
How to choose an estate agent?
The process of choosing an estate agent is an important one and shouldn’t just be based on the value they have given your home. If you have asked three agents in your area to value your home and need to choose one, these tips may be useful:
- Ask family and friends for recommendations.
- Check if the agent is a member of the National Association of Estate Agents.
- Find out how they plan on marketing your property.
- Consider visiting an estate agent as a potential buyer to see how they interact.
- Read the terms and conditions of their agreement carefully.
- Research reviews of the agent’s performance.
When making a selection, make sure the estate agent is fair and honest. Ask them how many viewings they get for the properties they promote, and where these potential buyers come from.
You want your estate agent to market your property effectively and work hard for their commission. Personal relationships matter too, so if the agent you like is professional and friendly, that’s a good sign. Potential buyers will likely feel the same.
How Can Property Saviour Help?
If you’re looking to sell, the Property Saviour team would be delighted to provide you with one of our free home valuation reports. We are pleased to offer a free cash offer worth between 80 and 75% of your property’s market value.
Plus, the sale can be completed in as little as 10 days with no estate agency or legal fees to pay. For more information, please don’t hesitate to contact our experts today.
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