Senior Director, Estate Agency
Valuing property is something of an art, but as a seller, how do you know whether the valuation you’ve been given is accurate?
Choosing the right estate agent to sell your home can sometimes feel like a minefield. In this article, we look at how estate agents value property and how you can make sure the valuation you’re given is accurate.
What estate agents look at when valuing property
Judging the value of a property is an art, not a science, says Edward Church, Head of Strutt & Parker‘s Canterbury office. “This is particularly true in specialist areas such as the country house market. You may have an idea of what price your home can achieve based on your own research, but a good estate agent will be honest about whether your estimate is realistic.”
As well as property size and location, when valuing a property, estate agents will take into consideration:
- Market reports
- Local knowledge, including micro markets
- Knowledge of previous sales and current demand in the housing market
- The quality of decoration and workmanship around the property
- Development opportunities or unique features
Edward says, “A selling agent should always be able to explain how they’ve come up with their valuation and give examples of what comparable properties have sold for.”
Why it’s not all about the numbers
It can be tempting to blindly choose the estate agent who’s given you the highest valuation. After all, you want the best price for your home!
But if a property is priced too high for the market, it won’t sell. The longer a home is on the market, the more likely buyers are to think there’s something wrong with it, and the more likely you are to have to drop the price. An agent should also take into account their knowledge of active buyers in the market; at the end of the day they are the ones who have to be persuaded to pay up!
Belinda Hutchinson-Smith, Head of Strutt & Parker's Shrewsbury office, believes the first 6 weeks of marketing are the golden window of opportunity. “The key to achieving a successful sale is keen and accurate pricing in order to generate viewings and interest from buyers. An over-ambitious valuation, although tempting, deters buyers from coming to view, prolongs a sale process and almost always results in a lower selling price.”
Of course, getting the best price for your home isn’t always your top priority. If you’ve already had an offer accepted on another property, then finding a reliable buyer who can meet your timescales may be more important.
5 Tips to find the best estate agent
Having an estate agent you trust can make the process of selling your home much less stressful, and help you develop a strategy to get the best possible price for your property. Here are our top tips to find the best estate agent for you:
1) Ask for evidence
You don’t have to take your estate agent’s figure at face value. Ask for evidence to substantiate their valuation, such as other properties they’ve sold in the same area and why they’ve valued yours higher or lower.
2) Consider a specialist agent
Edward says, “If you have a niche property, then it makes sense to find an estate agent who specialises in that type of property. Not only will they be able to give you a more accurate valuation, but they may already know of buyers who may be interested. This is also something to consider if you’d prefer to sell your property off-market.”
3) Ask for a secure lending figure
Although your buyer’s mortgage company will want to do their own valuation, you can run into issues if your sale price is significantly above what their mortgage company is prepared to lend. Always ask your estate agent what figure they’d put in if they were writing a letter to the bank, so you’ll know if this is likely to be an issue.
4) Enquire about varying fees
James Mackenzie, Head of Strutt & Parker’s Country House Department, suggests a different approach to have confidence in the valuation you’re given. “To make sure your agent is getting the price right, sellers should ask them to put their money where their mouth is by varying fees by percentage according to the agent’s valuation.”
5) Be wary of long contracts
One warning sign that an estate agent may have overvalued your home is if they tie you into a long contract. Remember the 6-week golden window, check your contract terms and try to avoid lengthy 6-month contracts.