How is the value of your property calculated?

September 2, 2016

When it comes to selling your home, you’ll naturally want to achieve the best price possible. So how do estate agents get an accurate selling price and what features will they take into account?   First though we need to clarify that officially a valuation for a property must be completed by a qualified surveyor. Estate agents provide a market value for a property, based on it’s perceived worth by prospective buyers.

Location, location, location

A significant consideration in the value of a property is the area it is situated in. The old saying that the three most significant factors that influence the desirability of a property are ‘location, location, location’ certainly holds true. Factors like good transport links, good schools and parks will all add value to a property. It doesn’t end there though; recent studies on the ‘Waitrose effect’ prove that living close to the right type of stores can also boost your property value. Conversely the same applies the other way – factors such as being located on a busy, main road or next to a train line can negatively impact on the value of a property.

The exterior

The appeal of the exterior of your property is a major influence. Research from Barclays Mortgages highlighted that the majority of house-hunters take just 10 seconds to decide whether they like a property from the outside. Over a third (35 per cent) of property buyers make their decision purely on a home’s exterior and won’t even venture inside if they were unimpressed! Therefore from a valuation perspective it has a huge influence. This is reinforced by the fact that almost half (44 per cent) of those researched would take up to 20% off a property’s asking price if an exterior was not appealing. For more information on how to present your property to sell, refer to our guide

‘Wow’ factors

These are the features that make your property stand out from others and add value. Original features like sash windows, fireplaces or flooring will increase the value in period homes. Newer houses have a long list of potential ‘wow’ factors such as an extension, luxury bathroom etc. Of course the ‘wow’ factor will differ for different potential buyers.   The net gain (or loss) of renovating a house prior to sale has previously been researched and produced some very interesting results.  In most circumstances the net gain of renovations is minimal; however the one exception is the exterior of the property. According to the report a spend of £100 – £1,000 can add up to £5,000 to a property value!

A house treated with TLC

At the basic end, this will mean having a clean, tidy and well-presented property. This can have a big impact on the perceived value of a property by prospective buyers. Northwood have produced a ‘Preparing your property for sale’ booklet to provide advice and guidance on how best to achieve the highest possible price based on presenting your property in the best possible way. Simple jobs just as decluttering, giving each room a clearly defined ‘purpose’ and repainting highly visible walls are all no/low cost, but incredibly effective ways of showing a little TLC.

 

Potential

Often buyers are usually looking to ‘grow into’ a new home and will be on the lookout for the potential to add rooms, convert lofts or even extend the property. Potential is not, however, confined to physical space. Developers moving into the area, shopping centres being built, new transport links and other signs of improvement that signify the area is ‘up and coming’ will also boost a property valuation.

 

The ‘ Feel’ of the house

A somewhat subjective area, this relates to the small details and cues that highlight potentially attractive features to prospective buyers. Family homes where people have put down roots and live in a well-cared for and loved family home will always appeal to buyers either already with a family or looking to start one. However the ‘feel’ of a house is not limited to just families but has been cited as an influencing factor for a wide range of buyers in a recent study. Your agent should recognise those features that create a ‘good vibe’ and can help to ensure that they are clearly presented to potential buyers. There are simple things that you can control to help create a positive vine such as turning the heating on just prior to a viewing or turning on the lights to brighten up dark corners all contribute to the feel of a house.

The Stats

Finally, a valuation should always take into account the ‘hard’ facts about the local sales market. The type of statistics will include things like the volume of properties currently on the market, recent sales, final selling prices, length of time on the market etc.  A good estate agent will know the current market conditions intimately but should always be able to produce the ‘hard facts’ to support a valuation given.

 

 

If you would like to get an idea of what your property could be worth, Northwood offer a free instant sales valuation or alternatively get in touch with your local Northwood office to arrange a sales valuation at a time that suits you.

Northwood is one of the largest and most recognised estate agents in the U.K. and the leading supplier of Guaranteed Rent to give landlords complete peace of mind.

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