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The Importance Of A Property Valuation

Apr 18, 2008
When it comes to selling you home there are few more emotive issues than the valuation of your property. The current property climate makes the valuation even more important as prices seem to be fluctuating and in some areas of the country, falling. It depends of course upon what you are using the valuation for. Agents will value your property in line with current market trends but their opinion is just that, opinion. It is chartered surveyors that can give a true valuation of a property that is accountable. This is usually required in mortgage deals as banks try to seek a cast iron sum for the lending of funds.

What is clear that in the UK the property market is currently slowing, while this may be untrue in areas such as London and the Southeast; in other parts of the country, prices are definitely falling. It is believed that the property market is in the worst state for a decade and hence a valuation that was legitimate six months ago may not be representative of a valuation in the present situation, subsequently up to date valuations are important. The reasons for the property market slowing are wide and diverse but what has been labelled the global 'credit crunch' is a definite factor.

While a valuation may place a figure on a property there is only one factor that determines price; that is what the buyer is willing to pay. Sellers today are currently in a buyer's market; supply has simply outweighed demand, meaning that the market is currently saturated with property choices. In this climate a valuation that is too high can seriously damage selling potential. It is believed that last year it took twenty percent longer to sell a house than in previous years, showing that the power is currently in the hands of the buyers.

The situation is not all bad for the property market however; seemingly the amount of first time buyer activity is increasing; in the past this has been seen as a precursor to resurgence. Property is once again becoming harder to come by as sellers realise that their valuation may be less than they are willing to accept, also fear and the media coverage of the 'credit crunch' have led to a loss of confidence and hence more people unwilling to put their property up for sale. This may be a good thing for the market generally as supply will once again hold sway over demand.

The process of making a valuation can be considered both art and science, making valuation resources extremely useful. For sellers the correct pricing is vital for a successful sale. If a property is undervalued a fast sale maybe assured but the money lost will be a painful infliction. Oppositely if a valuation is too high a property may sit on the market for a considerable amount of time, increasing the chance of sellers becoming frustrated and accepting too low a price.

Automatic systems for valuation are becoming increasingly popular for sellers. The benefits of these systems are clear; with a database of thousands of property valuations the comparisons made can be infinitely more useful than those of an estate agent. The systems will give a base figure and then with some detective work it is possible for you to make an accurate estimate. However it is not always a benefit to go automatic, an agent's unique knowledge of an area can be invaluable. As in most spheres, while technology may be advanced, the human factor should not be discounted.

Clearly the valuation of your property is a vital constituent of the sale; this is especially true in today's climate. The automated systems present at the moment may not be perfect but do make a brilliant starting point for an assessment. While the human element cannot be forgotten, as this technology becomes more advanced, sellers will increasingly be making their own estimates. Whether these will be worthwhile and accurate remains to be seen.
About the Author
Real estate expert Thomas Pretty looks into the importance of an accurate property valuation selling your home.
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