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The Difficulties Of The Modern Property Valuation

Jun 22, 2008
A property valuation has always contained an element of guess work; today however in a rapidly changing property market it has become even harder to reach an accurate figure. The global credit crunch has led many to assume that a property valuation made a month ago is quickly outdated meaning that the prices of properties on the market are wholly unrealistic. Ultimately a valuation is a process of risk management and estate agents in this tumultuous time are facing some of the hardest tasks ever when trying to find a figure for a property.

These kinds of market factors can lead to unscrupulous operators making inaccurate valuations meaning that the seller is faced with an even harder proposition when trying to find a figure for their property. For those who operate along ethical lines however the current situation means that their work has almost doubled when undertaking a property valuation. A valuation always includes drawing on knowledge of the locality and prices of similar properties in that area, now this process is made more difficult by the constantly shifting goalposts.

The hardest part of a property valuation in the current climate is ascertaining exactly where the market is at any one time. This manifests itself in two ways, firstly agents will find it hard to value a property if the market is set to change in the near future and secondly as the market is seemingly in a constant state of flux, it is hard to draw on any concrete figures from which to make comparisons. Both affect the quality of the valuation and how realistic it may, or may not be.

Fundamentally, agents must be aware of the limitations of their own knowledge and the data that is valid. As property prices continue to drop the chances of either pricing too high or too low become readily apparent. A value may be valid in one week, but a three percent drop in prices will soon make the house or flat overpriced and hence less likely to sell. On the other hand; if an agent under values a house trying to anticipate any movement in property prices, the situation may arise where the drop has been less than expected; subsequently losing the seller money.

This is why it is increasingly important when trying to find the value of your home to utilise as many valuation services as possible. Not only should you contact as many agents as you can seeking the widest scope possible for the eventual figure, but it is also advisable to utilise online valuation tools that draw on a recently updated database of sold properties. By doing this, you give yourself the best chance of finding the right value for your home; looking at all of the figures and then arriving at an average is the most sensible course of action.

Even in this state of flux there are certain courses of action that still ring true. It is always good advice to make the best of your home when it is being valued, this means cleaning it thoroughly, making sure the exterior and the roof are in a good state of repair including the gardens; on the whole making it as presentable as possible. If you fail to make the best of your home's assets you may find yourself receiving a value that is far less than you expected.

Property valuations have never been easy, currently they are harder than ever and the margins of error are greater than at any time in the past. The most advisable course of action is to poll as many agents as possible to arrive at a decent figure that will take into account market fluctuations without losing you too much money. Overall you need to keep an open mind when your home is being valued, being narrow minded may lead to your property sitting on the market for an extended period of time.
About the Author
Real estate expert Thomas Pretty looks into how conducting a property valuation is a skill that must draw on a great deal of knowledge.
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