What Is A Property Valuation Based On?

There may be no such thing as a real or genuine value for your property, but you can get a good or fair estimate. The value of your property will actually be determined by the free market, which can hardly be predicted and cannot be controlled. A property valuation is essentially a guideline to what a property will sell for.

Many people go to estate agents to perform a valuation for their property, however, an estate agent can only provide guidance on an asking price. While it is entirely possible for you to estimate the value of your property yourself, proper valuation can only be done by a chartered surveyor.

Property surveyors use three methods to estimate the value of a property:

  • The comparable sales method or the inferred analysis method; used to estimate the value of a house based on comparisons with the prices similar properties have sold for, that is, the market value.
  • The income method, fundamental method or intrinsic method; used to evaluate the current worth of a property based on projected rental income and resale value.
  • The cost approach method; used to estimate the replacement value of a property by assessing the cost of its components such as the land and the building.

What are the factors that can affect the estimated value of a property?

The value of a property may be estimated by any number of factors including location, the condition of the property, local and national market conditions including at what price similar properties are selling and being advertised for. Other factors include:

  • The age of the property.
  • The size of the house and the land.
  • Structural improvements and modifications made to the property.
  • The layout of the rooms.
  • Presence and condition of heating and electrical systems.
  • The amount of storage space.
  • Whether there’s a garage or off-street parking.
  • Presence of a private outdoor space.
  • Type of house; detached is generally more desirable than semi-detached, which is more desirable than end of terrace.
  • How well or poorly maintained the property is.

Does it matter how much I bought the property?

No. Many buyers wrongly believe that the price they paid for their property will be a determining factor during property valuation when this in fact has nothing to do with the current value of the property. It also doesn’t matter how much has been spent on the house for repairs and improvements, or how much the owner would like to sell for.

How much does the location of my property affect the estimated value?

The location of your property is an important consideration when determining its estimated value. Properties located in areas where there are desirable local amenities are expected to be valued higher than those located in areas with fewer or less impressive amenities. Specifically, properties that have good schools, parks, and transport links, as well as a good number of upmarket stores and restaurants around them, normally have great appeal and would naturally command a higher price.

How much do improvements matter on the estimated value of a property?

It is not uncommon to find home owners embarking on expensive projects to improve or expand their houses in hopes that it will be estimated at a higher value. Improving or expanding a house does put it in a good position to be valued higher than similar properties without the same modifications. That being said, property owners should be careful not to spend on costly improvements that won’t make much of a difference on the estimated value of the property.

What can I do to raise the value of my home?

Since there’s not much a home owner can do about the location of their property and it’s impossible to directly influence market forces, the only way to ensure a house is estimated at a higher value is to make desirable improvements to the property. Some of the more common improvements include:

  • Extending the house by adding an extra room or two.
  • Adding an extra bathroom, preferably en-suite.
  • Adding a conservatory built with quality material like glass.
  • Growing a well-groomed garden.
  • Repositioning rooms to create double bedrooms.
  • Getting the bathrooms or kitchen newly fitted.
  • Tastefully decorating the property.
  • Installing an alarm system if there isn’t one already.

What can I do to get ready for a valuation?

Taking the time to prepare for the arrival of a property surveyor may not lead to much of a difference in the estimated value of your property, but it might make a little difference. Here are a few steps you can take as a final effort to get a reasonable estimated value on your property:

  • Be sure to make extra cosmetic touches on the inside of the house.
  • Don’t try to shoddily cover up defects in the property as they will likely be noticed.
  • Get rid of clutter and clean the house.
  • Tidy up the exterior of the property, leaving nothing in a state of disrepair.
  • Finish up any improvements you’re making to the house because the surveyor won’t come up with an estimated value based on future improvements. Your house will be judged as it is at the time of valuation.

Will I get the estimated value of my property on the spot?

It is possible to obtain the estimated value of your property on the spot, however, it may be beneficial to let the surveyor perform further research before returning with a figure for you.

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Published on 1st June 2017

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