How to establish the market value of a property?
This will be the last free newsletter I publish, happy reading:
1. How to establish the market value of a property
This is not an exact science and you will not get the two same valuers agreeing on the market value of a property, just like you will never see two exact dental treatment plans. However I can estimate the market value of any property with great confidence by following the steps outline below. What we are trying to get is as many pieces of the jigsaw puzzle to get an accurate figure.
(i) historic prices – visit www.nethouseprices.co.uk and you can see what your property and other properties have sold for in the same street. The steps to take are:
– visit www.nethouseprices.co.uk
– type in a postcode in the postcode box
– either the street name or list of street names will appear
– click on the appropriate street name
– look at the figures. Word of caution, if we are in an upward tend in the property cycle, then the sold prices you will see, will be lower than the actual market value. If, on the other hand we are in a downtrend, then the sold prices you will see, will be higher than the actual market value.
(ii) current selling prices
(a) Visit www.rightmove.co.uk, enter the postcode of the house and click the ‘for sale’ button. You can tailor your search from the drop down boxes on the area size, type of property, number of bedrooms etc. As a vague general rule of thumb, I look at what current properties on the market are valued at and estimate the final selling price to be 93% of this guide price. The reason is that the figure you see on right move is the asking price and generally estate agents will have the asking price higher than the true market value. The reasoning is that everyone likes a bargain and the buyer will want to negotiate down and knock a few thousand pounds of the asking price. They will be happy since they paid less than the asking price, but in reality they have just paid the market value.
To use righmove, follow the steps outlined here:
Enter the postcode and press the ‘for sale’ button.
In the drop down boxes select the following options sort by lowest price, enter search radius, property type and number of rooms.
Select the Include Under Offer, Sold STC and Reserved properties. Then click find properties
A list of properties depending on your search criteria will then be listed showing current market sale prices
I then look at the bottom of this first page to gage what the asking prices state.
(b) Ask local estate agents – act as someone selling their property and someone looking for a property to buy on that particular street. You can compare the different valuations you get and take an average. When you have built a relationship with an estate agent, you will just need to ask them, but before you get to this stage you will need to make a couple of calls acting as a potential buyer and seller.
I would call and say my sister is looking to buy/sell a property but she is away at the moment and she has asked me to call a few estate agents just to get a feeling on how much she can sell for or needs to buy. This way they know its not yours and since your sister is away, they cant come and view the property or show you properties and they will give you a figure over the phone.
(iii) local area fluctuations – visit www.upmystreet.com and www.hometrack.co.uk
– Input the postcode and press GO. This will then lead you to the
neighbourhood profile page.
(iv) condition of property – go to ‘Google Maps’ and you will see the exact location of the property and what it looks like compared to others in the same street. Obviously until you go inside the property you won’t know how much work needs doing and how much it will cost to carry out the works. You will need to adjust down or up depending on the condition of the property when you undertake the viewing.
(v) ask the neighbours – everyone loves to give their opinion on property prices. Just knock on a few doors and ask them.
(vi) I would also visit www.landregistry.gov.uk and for a small fee you can see any secured loans or restrictions on that particular property.
A word of caution. Do not rely on just one source of information to determine the open market value. Look at all the pieces of the jigsaw and put them together to get an accurate value of the property.
2. Due to the continual success of the Dental Property Club I need to limit my time on certain activities.
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