This is obviously the most important question for people looking to sell their homes. The simple answer, of course, is it is worth what someone is willing to pay for it. However, in reality the answer can be much more complex…
With the rise of people using websites such as Righmove and Zoopla to buy and sell houses, people are increasingly turning to online valuation tools to establish their value. I always encourage vendors to do their homework as otherwise they may fall into the trap of believing an agent who tells them a sky-high (and probably unachievable) price to gain business. I cannot stress enough how using this strategy is unlikely to work and will probably result in your property being sat on the market for longer than necessary before needing a price reduction. This risks leaving potential buyers questioning why it has been on the market for so long and what has come to light to make the sellers drop the price.
So, what tools are available?
One of the most common phrases I hear when I am out on a valuation is “Zoopla says…” Zoopla uses a propriety algorithm based on house sales geographically to calculate what a property may be worth. But how accurate is it?
In my own experience I would say ‘not very’. I often find that homeowners who have used Zoopla for this purpose are disappointed with my valuation. I conducted an exercise with the houses I had recently agreed a sale on compared what Zoopla thought they were worth. I found that every single property Zoopla believed to be at least 14% higher than the price the sale was agreed at. One property was valued at worth 44% more than I had sold it for. In monetary terms the smallest discrepancy was £11,000, which makes a huge difference when selling your home.
Another tool anyone can access is the Nationwide House Price Index which is based on the value of the mortgages Nationwide approves (roughly 20% of the market not including cash sales). Although I find this tends to be more accurate than Zoopla, bear in mind that it calculates the current price from what the property was last sold for – so if someone got a bargain or paid too much it can drastically alter the results. It’s thus obviously of very limited use if this it’s the first time the house has been sold.
Personally, my favourite tool is the Land Registry, which offers a record of all sold prices in England and Wales (also available on Rightmove). Although this does take four to six weeks to update it provides a truthful price of what a house did sell for compared what it may have been marketed at (and is thus the perfect tool for the nosey neighbour in all of us if we want to see what the house next door really did sell for).
In practice, there clearly is not one perfect on-line valuation tool to use – in this as in so many aspects of life, each has its own pluses and minuses. However, if I were to say there was a source which can use multiple valuation tools combined with a wealth of local knowledge and a database full of potential buyers, would you be interested? If so, then I can reassuringly say that such a source does exist in the form of your local estate agency. If you want to find out what your property is really worth, please get in touch.
Nye & Co
If you would like any further property buying tips or home sales advice please feel free to contact me
on firstname.lastname@example.org or 01488 683 334