In one study by Oxford Economics, research shows house prices are overvalued by 10% in most advanced economies, and another report revealed that UK homeowners over-estimate the value of their properties by 23%. While achieving a fair price should be a priority, an overpriced property can languish unsold for months, putting buyers off.

If you want a realistic appraisal of your home, rather than be overwhelmed by the (often misleading) information online, guidance from your local estate agent is crucial.

Market appraisal vs valuation

Occasionally, there is some confusion around what a valuation is and what it entails.

A valuation is a formal review of your property by an expert valuation team. This paid service is highly in-depth and typically carried out for lending, inheritance or capital gains tax purposes, for example.

On the other hand, if you are looking for a realistic idea of what your property is worth before putting it on the market, a market appraisal is ideal. These are carried out by estate agents who combine expertise and local market knowledge to help you achieve a sale at the best possible price.

Achieving a realistic appraisal

While an internet search of sold prices can give a general idea of your home's worth, an estate agent's appraisal draws on their knowledge of the area, including local demand and achieved prices.

"A good agent will be able to give a market appraisal of how your home compares to others as well as the number of other properties up for sale in your area, and this will all have a bearing on its valuation," says Kate Eales, Head of Regional Agency

A reliable estate agent will know of any changes in the area, such as a new school or transport links, and how these are impacting house prices. They will also be aware of broader trends such as working from home, which has increased demand for properties with office space and gardens. Just look at the number of people who have moved to the countryside searching for bigger houses!

Kate says, "the race for space and demand for family homes in market towns and villages has grown enormously. All this has pushed up prices in the country house market."

An agent's appraisal includes other important factors, such as location (always crucial), the size of the property, décor, any unique features (such as high ceilings) and the potential for adding value: such as a new extension, loft or bathroom.

"The key to a successful sale is keen and accurate pricing to generate viewings and interest from buyers," says Kate. "An over-ambitious valuation deters buyers, prolongs a sale process and almost always results in a lower selling price."

The value of local knowledge

Depending on where you live, an agent with local knowledge can make the process much more streamlined.

For example, in Scotland, properties have to be marketed with a Home Report that is made available to prospective buyers on request.

The Home Report contains a pack of three documents:

• A Single Survey: An assessment by a surveyor of the condition of the home and valuation figure.
• An Energy Report: An assessment by a surveyor of the energy efficiency of the home and its environmental impact. It also recommends ways to improve its energy efficiency.
• A Property Questionnaire: This is completed by the seller of the home and contains additional information about the home, such as Council Tax banding and factoring costs that will be useful to buyers.

FAQs about Appraisals

1. How quickly do you sell houses like mine?

A good estate agent will be transparent and able to produce evidence they can share with you, including information on how often they achieve the asking price and what local demand is like.

2. Is there anything new locally that will impact the appraisal?

The agent should be aware of any new roads, rail links, businesses or schools, all of which could impact local property prices.

3. What is the broader market like?

Obvious, but if house prices are rising in the rest of the country, then yours should be too. The question is, by how much? Areas differ.

4. Is this the best time of the year to sell?

Estate agent folklore has it that winter is a more challenging time to sell than spring and summer. Online portals have challenged this to some extent.

5. Will refurbishing or decorating increase the value?

Not necessarily. Your chosen selling agent will be able to advise as to whether or not to carry out any works before coming to the market.

How to choose an 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 for finding the best estate agent:

1) Ask for evidence

You don't have to take your estate agent's figure at face value. Ask for evidence to back up their appraisal, 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

If you have a niche property, it makes sense to find an agent specialising in that type of property. Not only will they be able to give you a more accurate appraisal, 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 or appraisal, 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 lender, so you'll know if this is likely to be an issue.

4) Enquire about varying fees

Katesuggests a different approach to have confidence in the appraisal you're given. "To make sure your agent is getting the price right, sellers should ask them what is possible when it comes to varying fees by percentage according to the agent's valuation. It is important to not choose the lowest fee. A good estate agent might achieve 10 per cent more for your property than an average estate agent, whilst a bad estate agent might achieve 10 per cent less.

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.

Why Strutt & Parker?

If you’re thinking of selling or letting your property, or simply want an update on the local market, our experienced teams can help. Strutt & Parker specialises in providing our clients with a personal, discreet service and, with an active database of highly motivated buyers across a national network of over 45 offices, we’ll work with you to develop the best approach.

Speak to us to get started.