Are you planning to buy or sell a house? Are you considering getting value for the money? We here are happy to guide you to achieve the latter. Determining home value is a very critical stage real estate stakeholders take seriously and exhaust all possible options when checking house worth.
House valuation is a critical appraisal of the worth of a house based on several factors like the condition of the house, location, current market, season, etc.
An understanding of this provides a fair idea of what a qualified surveyor may quote in the valuation report as your house's worth. To calculate house value, one needs knowledge of the real estate industry.
There are several ways to calculate the value of a house.
Online valuation software is a software provided by most real estate firms on their website for a quick valuation. This valuation tool is there to guide you in finding your house's worth and is free at our end.
Now, we take you through a step-by-step procedure to have an instant house valuation within three minutes at RealAdvisor .
Follow our steps to conduct an online valuation
Select your country, click on our estimate link and enter the following;
The last requirement is to provide verification and a valuation quote sent appears. These tools are technically termed automated valuation models used by real estate agents and lenders.
Also, online public records like tax assessments, ownership deeds, and transfer of property records along with some economical and statistical models will aid in calculating the value of a house.
These automated valuation models are used in generating a form of scorecards which are then compared to the prevailing market values. It must be noted that it is still expedient to have a discussion with a real estate expert within the locality when finalising the results produced by the tools for more insight.
Local real estate agents are licensed persons equipped and aware of the trends and behaviour of the local estate industry. Because they always sell properties on behalf of owners, they are always informed of how much local houses cost.
When you plan to buy or sell a house using local agents, it makes processes simple and quicker.
Local estate agents mostly conduct what is called market valuation. They value your property by considering the fair values of similar houses, in the locality. They come for physical inspection and advice on the best price to sell your property.
They do this for free and take the opportunity to pitch their service and market themselves to you. One criticism of using an estate agent is the high possibility of bias.
Professional appraisers or surveyors use RIC standards when conducting an appraisal. They are fully unbiased and will inform on core issues that might cause defects to the house being valued.
Surveyors conduct property characteristics-based valuation. They value property by considering its current and future potential. They also engage in a series of inspections for the valuation.
Their services are required in mortgages and legal issues because of their professionalism. Professional surveyors charge fees for their services. They charge from £150 depending on the type of house and type of valuation.
These appraisers are hired to do what customers want. You can hire an appraiser to estimate the value of a property in a past period or now. Professional appraisers may look at trends in the market, property, or comparable properties.
This is when you compare the prices of other similar properties or houses in your locality.
When you do this you get the price floors and price ceilings for several classifications of houses. This gives you a fair idea of what value to tag your property or one which you want to acquire.
You can compare prices of similar houses through;
The UK House Price Index (HPI) uses house sales data from HM Land Registry, Registers of Scotland and Land and Property Services Northern Ireland and is calculated by the Office for National Statistics.
This index is published monthly. Using this data is reliable and very exhaustive as it includes all houses sold for that period. You can access the UK House Price Index reports pages to download data on the prices of houses sold.
Pull data on houses that are similar to what you want to value, and strike the average of these prices to obtain a fair idea of how much your house may value.
Currently, as of July 2022, the average house price in the UK was £292,118. Overall property prices have risen by 2% compared to the previous month and as high as 15.5% compared to previous years.
There are several situations in life that call for house valuation. Some of these are;
House valuation is vital for several reasons. Some of these reasons are explained.
Knowing how to accurately determine the market value of houses over seasons helps you to sell or buy properties to gain a competitive advantage in the estate market.
Market volatility and seasonal dynamism are brought to bear having calculated the value of the house over time. This provides you with some control over the market. It may be more favourable to check house worth in a certain period of the year.
One may ask, "What are the things to consider when determining my home's worth"? Some factors you need to consider when you want to calculate house value are;
What type of house or property is being valued? What are the age, size, design, and level of quality of materials used? These are critical queries investigated when calculating the value of a house. They are said to form the basis of valuation.
In calculating your house's worth, you may want to factor in the number of sleeping rooms, halls, washrooms, gardens, car parks, and front space available.
House evaluators also look at how old the house is. The age may also inform how current the designs are and the level of quality of materials used. These are very important because you may acquire a house and end up demolishing the structure itself as it may not meet your standard.
To some extent the purpose for which a property will be used can influence the value to be quoted. Properties for domestication are likely to last longer than commercialising it.
For example, the maintenance cost for using a property for health services is likely to be higher when such property is used as a home.
Values of houses are inflated when being sold to large companies using the property for commercial purposes.
Two similar properties or houses in different locations may have different valuations. Determining the market worth of houses in cities and rural communities gives different values mostly as a result of demand and supply.
Houses in cities and capitals are demanded more compared to those in communities outside the cities. Cities host multinational corporations, head offices of firms, multipurpose health facilities, and other important social centres. This adds to the value of houses in cities.
With the location of the house, the security of dwellers may also influence the value of the house. For example, houses in gated communities are valued differently from others hence location is vital when calculating house value.
These communities provide extra security for their dwellers with ultra-modern security technology and established protocols right from the entrance of the gated estate to your house or door.
The real estate market may depict a particular trend at a given period. Knowing these trends will assist you in making an informed decision on when and how much to sell a house.
Also, there may be seasons in a year where global markets experience shocks, poor exchange rates, and high inflation. Valuation of houses in times like these is critical.
There are seasons when the real estate industry experiences several mortgage payment defaults. Valuing a house in times like these to sell may not yield the expected outcome.
Thus, the prevailing trend in the market which could be a decline or rise in demand for house purchases may influence how much a house is valued.
Aside from the urban-rural factor for disparities in house valuation, the nearness of a house or property to an essential or amusement facility like a hospital, school, police station, park, etc informs the calculation of house worth.
When calculating house value, properties closer to these amenities or facilities tend to receive some appreciation in value because of the ease of reaching such facilities.
Real estate agents take more interest in constructing properties closer to football pitches, malls, ports, beaches, etc. as these places add to the value of a house. This occurs because of the convenience people receive when accessing such facilities.
House owners and estate agents quickly convert houses closer to these places into hostels or hotels to serve the general public. Buying a house for such a purpose is more costly in those areas.
Another factor to consider when valuing a house either to sell or buy is analysing the immediate environment of such a house. Some houses are situated a few metres away from industrial plants which may often release toxic substances into the atmosphere.
These chemical substances in the form of gases and liquids are injurious to the health of residents living closer to such plants. Also, some houses are situated in disaster areas like earthquake zones, wildfire areas, flood areas, etc. For example, there are yearly heat waves across Europe and other parts of the globe leading to extreme fires which burn houses and sometimes result in the evacuation of a whole community.
Similarly, valuing houses in these risky and life-threatening areas puts into consideration the environmental risk posed to the houses in these disaster areas.
It is interesting to know that the value of your house may be influenced by the national policy being rolled out for that period. Various governments sometimes institute policies to counter the housing deficit.
In times when the cost of housing is extremely huge, governments come in to undertake a housing project which may influence the worth of your house. When affordable houses are built as a result of these government interventions toward the housing deficit your house's worth may dwindle.
This will happen because of excess supply over demand leading to a general reduction in the value of houses.
House valuation is an important pillar in the real estate business and is considered to be the heart of the industry. It is therefore very important to have the correct valuation for a property to benefit from its purchase or sale.
Contact us at RealAdvisor for more information on how to calculate the value of a house. We are here to guide you to calculate your house value.
In summary, these are key points about house valuation and the need for it:
If you need a quick house valuation within a few minutes contact us at RealAdvisor. Our online valuation estimator takes you through simple steps in less than four minutes to have a house valued. If you need a quick valuation online is the way to go.
When you plan to sell your property, you will not be able to change your location but you think about renovation, extending the floor area, adding a bathroom, bedroom etc. make sure the house is well presented.