Whether you are buying, or selling or investing in a property, finding out the estimated current market value of a property is a necessary step. A property valuation can provide a quick and easy estimate of the value of your property. The best property valuation is the one that most closely determines the value of a property.
You need a house valuation if you desire an estimate of how much your house is worth depending on certain factors. If you are looking to put your house on the property market, a valuation would give you a good idea of what your asking price should be. Whether or not you plan to move away, having a house valuation conducted is the perfect way to discover its worth and find out if improvements to the home would actually serve to increase the value of your home. After finding the estimated value of your home, comparisons can then be carried out between your property and other sold properties on your agent’s list. Doing this will provide a clear indication of any improvements that need to be made in order to further increase the value of the property.
A lender will usually request an independent valuation as part of an application for a re-mortgage to ensure that the property will provide adequate security for the mortgage. This valuation will offer the lender an idea of the value of the property on the market, accounting for comparable sales data. Estate agents can give their own ideas of what your house is worth on the market. Inviting a few agents to get different opinions will usually lead to a variance in the results. While the highest valuation report might sound tempting, it could simply be a ploy to secure your business. The most realistic value should be used for your re-mortgage application.
The estate agent plays such a big role when you need to sell your house. Even though it is not completely necessary to use an estate agent to sell your house, we strongly recommend it. Due to the complex nature of house sales, only a few would actually attempt to sell their property without professional help. With the many things to take into consideration when selling a house, estate agents provide much needed expertise in the important valuation and negotiation stages of the sale. They will be proactive in pushing the sale through, making sure to avoid delays or complications in the process. When you need a property valuation, your estate agent can recommend good options of professional valuers who will do the valuation as fairly as possible to help you meet your goals, whether for a mortgage or for a property sale.
Both single and multi-agency agreements come with certain advantages. Single agency gives you focused and dedicated service. With multi-agency however, the bid prices are driven higher as a result of an increase in competition leading to sales that progress in a more efficient manner. Whichever agency plan you eventually decide on however, it is important to request that the agent explain his valuation. Comparable data should be made available to justify their valuation. It is also in your best interest to check information about prices of recently sold properties and the current asking prices in the market to gain some sense of the trends as they occur in the market.
Your valuation requirements are given to a registered valuer who will contact you to set up an appointment to view and photograph your property at your own convenient time. After the inspection of your property, a valuation report is created, which is checked by the valuer and then released to you.
The valuer needs to be granted access to the interior of the property in order to carry out the necessary inspection for the valuation. The internal condition of the property cannot be certified without an inspection. The total market value of the property must take all aspects of the property, both internal and external, into consideration.
The best property valuation for you will depend on your investment purposes. For instance, whether you fall into the category of a property developer, a commercial investor, HMO investor, or every other type of investor. Some property developers will get the best property valuation through the residual method, commercial investors and HMO investors will need the investment method of property valuation to reach their valuation goals, and the comparative method will be better suited to every other type of investor. Understanding the specific purposes of each valuation method will help you to choose the best property valuation:
Comparative method: used to compare your property with other similar properties, and very useful for residential investors.
Investment method: makes use of discounted cash flow techniques in order to establish value of the property by measuring its capacity to produce income. Commercial valuations as well as HMO valuations make use of this method.
Residual method: mainly used to establish the valuation of sites under development. The cost of developing the land as well as the final gross development value are taken into account in assigning a value to the land.
Profits method: used majorly as the go-to method of valuation for business premises. Properties such as hotels and cinemas for instance can be valued using their generation of profits as an indicator.
Replacement cost method: this method of property valuation is generally reserved for buildings where there is very little comparable evidence, i.e. it would be difficult to find other similar properties to compare the property with to come up with a valuation report. Properties such as churches or schools, for instance, will be valued using the replacement cost method. The current value of the land and the cost to rebuild the structure are used as the basis of valuation in such cases.
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