Over recent months it has become clear that there are very few people who really know what a house is worth. With values falling by around 20% a year the task of working out what somewhere is worth seems to be as difficult as renting an adult video and not getting caught!
You’d have thought that if anyone should know it ought to be estate agents. Sadly, whilst the professional agent can always be relied upon to give objective advice, there will always be one who will ‘value for instruction’ or to give it a more accurate description, telling you what you want to hear.
If you have three estate agents all hoping to get the chance to add your property to the list of others they can’t sell then human nature suggests that you are more likely to favor the one who tells you what you want to hear over the one who tries to explain that yours is not really any better than the other six in the street that can’t sell at half the price you want! Agents are salesmen, you should always ask more than one and ask them all to substantiate their advice.
What else has sold? What else is for sale that buyers could choose for the same money? Who’s in the market for a home like yours? If there are 5 buyers and yours is the only house then your away! If the numbers are reversed then you need all the agents skill to make your property more attractive than the other four.
Valuers or surveyors are Chartered Surveyors. They have the initials RICS after their name and you pay them for their opinion. If they’re wrong you can sue them. They value homes all day long – for banks, for businesses and for the tax man. Most will always be cautious since they are rarely sued for valuing something too cheaply. Many’s the time I had to re-negotiate a deal after the valuer came round and knocked the deal price by 5 or 10% just to cover their arse, as I saw it.
Because there are so few deals being done at the moment there are very few comparables for valuers to use. There are usually as many different views as there are people you ask. So, save your money and try looking closer to home.
Imagine I was holding up a £20 note. If I asked you to give me £25 for it you’d be reluctant to say the least. But if I ask you for £15 then I imagine I’d get your attention. A crisp £20 for the price of £15! Doubtless I could get other people too and before you know it, someone ups your bid of £15 and offers me £18. And so on.
Now houses are harder to value than a piece of paper with it’s value written on it – Zimbabwe dollars are an exception! So, when it comes to working out what the home you are selling is worth in a market when fewer than one in ten are selling you must err on the side of caution and ask a price that will get peoples attention. Ask too much and they will disappear. Same goes if you want to buy something. Any fool can pay too much but if you buy it for too little then all you have done is prepare a story you can bore your friends with for the next decade. “Oh, yes, we bought our house right at the bottom of the last property recession. We must have made at least ……..