How To Work Out What Your Property Is Worth?

Attempting to figure out precisely how much my house is worth is pretty hard without investing some time in some deailed research

As we all learned very recently, a home is only worth what a person will pay for it. The question of whether this is true for a home’s worth when it’s property owner doesn’t plan to sell is akin to the quandary of whether a tree felled in an empty wood still makes a sound.

Just as with an insurance valuation for an art work, it’s one thing for a knowelable expert to put a notional value on something but in a real marketplace (such as an aution room) it’s sale price may end up well in excess of the initial valuation.. This problem is even more accute with houses as there are so many more factors (such as taste, location, availability and cost of mortgage funding etc.) to take into account.

But, How Much Is My House Worth? There must be a way or ways to at least get an idea? You’re right, there are:

Obviously you could just ask 3 estate agents to come to your house and value it. The problem is that estate agents are wel know to inflate the value of a property in order to win instructions. That’s fine however, unless i have my own idea (and logical theory) as to how much my house is worth, I am not going to be able to challenge the estate agents’ figure. 

The growth in property prices in 2009 showed us that short supply of property and particularly of good property in a good area, can cause houses to sell for more than their current value according to national and regional indices. So to answer the question how much is my house worth; I really need to do some detailed research.

That said: I decided the best place to start my research would be online. In the UK there are two banks (Halifax & Nationwide) that publish house price indicies however, we also have an institution called The Land Registary and amongst other things they keep a record of all the prices that property actually sold for. This is very useful data because “sold” prices represent the “true” market value, whereas estate agent’s asking prices simply reflect a property’s “hope” value.

In searching for free online house valuations, my initial step ended up being to look into The Land Registry data available. This told me just how much homes in my area have been selling for since 2006, including a breakdown by property type. Next I took a look at the Nationwide property value calculator and used it to see the change in value of property in my area over time.

This research provided me with a great kick off point, but for the actual answer to the question of, “How Much is my House Worth?” I sitll needed to hit the streets, the estate agents, and also the online portals, to find out how many properties like ours there are for sale. When you attempt this little research exersize, pay particular attention as to whether there exists a shortage of supply for your style of home. If your property exceptional and in a good area, then on a pounds per square foot basis it’s right to value it above the local average. On the other hand, if you need to sell property fast and have an average property, which has lots of competition will need to be priced at either the local average or lower in order to find a buyer and as such have any value.

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