How Is The Value Of My House Determined?
To put it simply, a house is essentially worth whatever a prospective buyer is willing to pay for it. However, it isn’t as simple as this in reality. There are many factors when it comes to the value of your home. Here at House Sales Direct, we have compiled a brief guide on how the value of your property is determined.
What is Market Value?
Market value is essentially how much your house is numerically worth while it is up for sale. It is the price that is set when your home is on the property market, and what a prospective buyer is willing to pay for it.
What Determines the Value of My Property?
There are plenty of factors that can contribute to the overall value of your home. Some of these factors are easily changed, whereas there are things that you have to accept, such as the location of your property. Here are a few of the determining factors that arise when having your property value determined:
The Location of Your Property
It’s true what they say – location is key! To put it simply, the location of a property creates the notion of desirability, which therefore increases the demand for that specific area, which will ultimately raise the price of properties in that area.
Location is important when it comes to other various factors such as crime rate, local amenities and transport links. Most homebuyers want a property in a ‘good’ location (the term good is subjective here). Depending on the type of property you are looking for, this may impact on what you deem a suitable area. For example, if you are looking for an apartment, you may consider city center living as the pinnacle of convenience, however, if you are trying to find a family home, then you may look for something in a more rural area that is closer to schools.
The location of your property is an important aspect of property valuations, as some areas tend to become trendy for a short while, and then lose their significance and therefore property value.
The Condition of Your Property:
Perhaps one of the most important factors is the condition of your property. The valuation placed on your house will be significantly higher if your property is in good condition, as it demonstrates not only maintenance and care for the home’s aesthetic value, but also the functionality of the property itself. It demonstrates that this is a home that should be valued higher due to the care, pride and priority that has been given to the home, in addition to the home being more visually appealing.
The Asking and Selling Price of Similar Properties:
Similar houses are used as comparable properties so that major companies such as Rightmove and Zoopla can provide a somewhat accurate value on similar properties. Out of the two, the selling price of similar houses is probably a better comparable, as you can use government official sites such as HM Land Registry to see the annual rise and fall of similar properties over the past few years in all council areas.
Things That Your House Won’t Be Valued On:
The factors that your house is being valued on can be quite a confusing process. Therefore, we have compiled a small list of things that your house will NOT be valued on:
- What you bought the house for, in addition to any allowance in price rises since the purchase.
- What you as the homeowner think the property is worth.
- The reasons why you need to sell and how the valuation of your current house can impact this. For example, to buy another house or pay off the mortgage on your current property.
- How much have you spent on the property since you owned it- for example, if you have added an extension or any costly improvements.
- The value from a singular estate agent.
- Any figure that an online house price calculator suggests your house is worth.
If you want to make sure your house is valued highly, here are some smart and easy ways to boost its market value.
Who Do I Ask to Value My House?
It’s important to get multiple opinions when it comes to getting your house valued. It’s important to not take just the first figure you hear, as this can be a huge mistake and potentially cost you thousands.
Get Multiple Estate Agents’ Opinion:
Most estate agents want your business and the sale of your property, but it’s important to take a look around multiple estate agents before you make your decision as they are trying to gain a sale in a very overcrowded market. Estate agents are very knowledgeable about the property market and are more than often than not, reliable.
RICS Property Surveyor:
Another option is to get your house surveyed by someone from HMRC. This can help you to build a strong case for your property valuation, however it’s an option that you would have to pay for. This is only worthwhile doing if the value of your estate is closer to or exceeds the inheritance tax threshold.