How to get the best valuation on your home

Home is where the heart is, but it is also likely to be the biggest financial commitment you make in your life, particularly if you are a property investor. Therefore, when the time comes to sell a property, you will want to get a fair and accurate valuation for it. That might seem as simple as calling the nearest estate agent, but this does not always give you everything you need.

How to value a property

Valuing a property is not simply about counting the bedrooms and picking a number. There are actually five different methods of coming up with a price, depending on the property in question.

The comparative method is very common for residential investors, and this compares the property with similar ones in the area. The investment method uses discounted cash flow techniques to establish value through the potential income that the property offers.

In the case of development sites, the residual method uses the cost of developing the land and the final gross development value. The profits method is used as a valuation for a business premises whilst the replacement cost method identifies to cost to rebuild a structure with little comparable evidence, such as a church or a school.

Property surveyors

When a surveyor visits the property, make sure that you are on hand to provide them with access and to honestly answer any of their questions. It might be tempting to embellish a few facts, but this will only lead to you getting a valuation that will eventually get knocked down.

Take the opportunity to talk to the surveyor about the work you have done on the property, both structurally and cosmetically, as not everything will be immediately obvious. You can then discuss what you paid for the property and when you purchased it.

You should also tell them if there were any special circumstances, such as buying from a family member, that meant you got it at a discounted rate. This will help your surveyor to see that if you paid a lower price for the property, there was a good reason for it, which might help them realise a higher value for the property in its current state.

If you are familiar with any comparable evidence, make sure that you bring it to the surveyor’s attention. You might be able to draw attention to the fact that prices in the area have shot up in the last year or that next door sold for more than expected. If you have already received offers for the property that were close to the price you were hoping to get for it, then pointing it out can’t hurt as it emphasises that others feel this is a realistic value.

If the property is a buy-to-let investment, you will need to provide evidence of comparable rental figures to show what can be achieved.

Valuation Pitfalls

One of the main reasons that surveyors knock down the value of a house is because it was over-priced in the first place. Being honest with your surveyors and estate agents means that they can give you a realistic valuation that is more likely to be realised.

Trying to hide things in the valuation is never wise as surveyors will usually find them out eventually, and you could be in for a nasty shock. By being upfront and taking the opportunity to explain situations, you will get a valuation that is much fairer and more likely to progress a sale.

To know what value your property should be, you need to do your homework. By gathering evidence of local markets, rental trends and the amount you have spent on a property, you can inform those valuing it better and help them to come to a good valuation that truly reflects the property.