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A Property Valuation; Never One Hundred Percent Accurate

Jun 3, 2008
Gaining a property valuation is a fundamental part of selling or buying. Naturally the buyers will want to receive a low valuation and sellers the exact opposite. As both parties approach the negotiation phase, it is important to have an unbiased valuation of the property to make sure that no party is particularly favoured. This will help both buyer and seller to achieve common ground.

Ultimately a property is only worth what someone is willing to pay for it. A valuation however is still important, if only used to gain a ball park figure. A property valuation, whether carried out by an estate agent, a surveyor or by using an AVM (automatic valuation model) is only an estimate, it can be never be considered one hundred percent accurate due to the guesswork involved when arriving at a figure.

All three, the agent, surveyor and AVM include the same processes when undertaking a property valuation. If the task is performed well and effectively an accurate estimate can be made, although once again it is only a rough guide as the willingness of a buyer to pay the price is the determining factor. The process is fundamentally a combination of art and science. A figure will always be arrived at after considering the following elements.

Property condition is the primary factor in a valuation, if your property is of poor quality and literally falling apart at the seams, the estimate will most likely reflect this. In addition to the condition, upgrades or extensions will also be taken into account when estimating a price; the quality of the work and usability of extensions will also be considered. After these two finite qualities the art part of valuating comes into play; this is fundamentally factoring the current market conditions and the conditions of the sale. Overall these four primary factors to a valuation must recognise that all properties are unique so using a generic method may in some cases be inaccurate.

For those trying to sell, the property valuation is often especial importance. While under-pricing your home may result in a speedier sale, there is a high chance of losing out on that extra couple of thousand; naturally no one wants to lose money so getting as much as possible is always advisable. On the other hand, by over-pricing your property it is possible that your home will sit on the market for a long time with little or no interest. If this is the case it is more likely that you will lose money on the eventual price and may even fall into the trap of desperation selling.

In the same vein buyers should consider a new home very carefully. It is advisable to avoid buying a property purely because of emotional reasons, especially when the price is too high. Try using an AVM for your prospective new home to receive an objective view of its worth before contemplating buying it. Trying to remain logical and thinking with your head rather than your heart is a fundamental part of buying property.

Although no property valuation is ever perfect and one hundred percent accurate it will give you, as either a buyer or a seller a good idea of what you should be paying or receiving. AVMs are understandably becoming a popular choice due to their ultimate objectivity over an estate agent. Just be prepared when you submit the details, the price may either far more than you are willing to pay, or far less than you are willing to accept.
About the Author
Real estate expert Thomas Pretty looks into how a property valuation is made and how it can benefit both buyers and sellers.
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