Selling your home can seem daunting, with one of the first major steps being to determine its current market value. While online estimates can provide a rough guide, when it’s time to list your property, an expert valuation from a local estate agent is usually the preferred method.
But what exactly goes into their valuation process? From the primary factors they consider to the important questions you’ll be asked, this guide breaks down how estate agents calculate your home’s worth.
How is a property price determined?
When valuing your home, there are some fundamental factors that form the basis for an estate agent’s pricing estimate:
Location
This is usually the biggest determinant of a property’s value. Homes in desirable areas or cities tend to command higher prices. An agent will analyse recently sold prices for similar properties in your neighbourhood.
Size
The square footage and number of bedrooms and bathrooms heavily impact value. Larger homes with more rooms and living space are typically priced higher.
Local housing market
Estate agents stay knowledgeable about demand levels and price trends in each micro-market they cover. If it’s a seller’s market with low inventory, pricing may be more aggressive.
Beyond these broad factors, there are several specific elements relating to your individual property that an in-person valuation allows the agent to assess:
- Condition: An updated, well-maintained home that’s move-in ready condition can demand a premium over a property in need of renovations.
- Extensions or renovations: Any additions or high-quality upgrades you’ve made, like a new kitchen or bathroom, can increase the valuation if done properly.
- Internal fixtures and fittings: The calibre of things like flooring, windows, appliances, lighting and general finish work throughout will be considered.
Seeing the actual property means the agent can evaluate any unique features or potential that could significantly raise or lower the value beyond just the basic stats.
How do market comparables work?
While assessing your home’s specific characteristics is important, estate agents don’t value properties in a vacuum. To price your listing accurately, they will research recent sales of similar homes in the area. This allows them to see what buyers are truly paying in the current market.
The agent analyses prices for properties that are as comparable to yours as possible in terms of:
- Location (same neighbourhood, nearby streets)
- Home type (detached, semi, terraced, flat, etc.)
- Age and condition
- Number of bedrooms and bathrooms
- Square footage
- Garage, garden and parking availability
They’ll compile these “comparable” sale prices, which represent the competition your home will be priced against. While minor adjustments may be made for differences, this comparative market analysis gives them an extremely solid baseline figure.
The agent can then factor in your home’s unique traits that add or detract value to reach a recommended listing price that will be competitive and reflect fair market value based on recent buyer activity.
Ultimately, buyers will be cross-shopping your listing against those same comparable homes that have sold. Aligning with the market reality plays a central role for pricing correctly.
Are property valuations reliable?
It’s common for homeowners to first seek an online property valuation before speaking to an estate agent. While these automated estimates can provide a helpful initial guide, there are limitations to their accuracy.
Online valuation Pros:
- Draws data from public property records and recent sale prices in the area
- Can give a broad valuation range quickly and easily
- Useful for getting a rough idea of your home’s worth early on
Online valuation cons:
- Lacks the nuance of an in-person evaluation by an experienced local agent
- Doesn’t account for unique property traits, upgrades or condition factors
- Estimate can be drastically over or undervalued depending on the quality of data
As convenient as they are, online valuations should be viewed as just one data point. The detailed assessment that happens during an estate agent’s expert valuation is usually more important for a proper pricing strategy.
An algorithm can never fully replace the knowledge and expertise provided during a comprehensive interior and exterior evaluation. There are so many micro-factors that go into determining accurate value.
While online estimates are a good starting point, when you’re seriously ready to sell, a valuation is important for making sure your home is priced correctly to maximise buyer interest and your ultimate sale price.
How many estate agent valuations should I get?
Once you’ve decided to sell your home, it’s generally recommended to get several valuations from different estate agents. This allows you to have a range of expert opinions before setting your listing price.
Why get 2-3 valuations?
- Accounts for variance in how each agent views your property’s condition and value drivers
- Lets you compare pricing strategies and local market knowledge
- Agents may identify unique selling points others missed
- You can assess each agent’s professionalism and selling approach
However, avoid the mistake of simply going with the highest valuation. An inflated price could cause your listing to sit stale without any offers. While a higher valuation may seem appealing, aim for an honest and accurate assessment, not an overvaluation aimed at just winning your business.
Estate agent valuations are usually free. But estate agents have a vested interest in you selling your home via their service, so there may be a temptation to give slightly high valuations. But with a couple of valuations from experienced, reputable local estate agents, you’ll can work out the average and it should be more or less spot on.
Alternatively, you can get your property valued by a RICs surveyor. RICs valuations are not free, but they will be unbiased.
Should I get an estate agent valuation if I want to sell my home quickly?
Getting an estate agent valuation is typically advisable when selling on the traditional property market, but there are situations where speed is the top priority. If you need to sell your house quickly due to reasons like relocation, inheritance issues, divorce or financial difficulties, the conventional route of listings and viewings may be too slow for your liking.
This is where Property Rescue provides an alternative path. Rather than waiting for 3 – 6 months to sell a home via an estate agent, we make cash offers to purchase properties directly from homeowners in a matter of days.
How It works
Property Rescue uses valuation techniques employed by surveyors and agents to quickly assess a property’s worth. Within hours of being contacted, we provide a no-obligation cash offer.
If accepted, we ensure a guaranteed sale by arranging an independent home survey prior to completion. We cover legal fees for both parties.. By cutting out estate agent fees, EPCs and repair costs typically tied to traditional sales, we simplify transactions. Homeowners can avoid uncertainty around attracting buyers or chains breaking down.
So while estate agent valuations are crucial for ensuring an optimal sale price on the open market, companies like Property Rescue are often the best route for those needing to sell quickly with a guaranteed sale.
Summary: valuing your house
Whether selling via the open market or a quick cash purchase, understanding your home’s valuation is key for knowing how much you’ll get. For traditional sales, get multiple estate agent valuations to ensure accurate pricing. If you need a swift sale, Property Rescue offers a convenient solution by quickly purchasing homes.