Your house valuation is too important to leave to other people. Plain and simple.... After all, your financial future is at stake...So.. No matter how you intend to sell, your home valuation is an area you'll want to take an interest in. Big time. But the good news is that valuing your home isn't too complicated once you know what's involved. A house valuation is an art..not a science. For any given property there is a range of possible values. This range depends on a number of factors. Supply and demand being one. How quickly you want to sell being another. To what extent is any house valuation accurate? Good question. A number of commentators (including estate agents!) suggest the practice of over-valuing property in the UK is widespread. Who remembers the BBC’s ‘Whistleblower’ programme in March 2006? Whether estate agents are consciously aware of the practice or not, it’s easy to see how some properties might come to the market over-valued. But do remember, any house valuation will always involve an element of judgement. Why you need to value your own house In its most basic form the over-valuation of properties is a tactic some estate agents may use to win new business. And if the actual selling price is a negotiated one then you may wonder where’s the harm? Make no mistake. Some agents will try to appeal to your emotional need...for a high house valuation.. For lots of lolly... Most of us want to believe (really we do..) our property is worth as much as possible. So it’s easy to be seduced by inflated numbers because ‘the estate agent knows best’. And the truth is.. An estate agent's house valuation is best thought of as an opinion on where you should pitch the asking price of your house. A house valuation is actually closer to a selling price rather than an asking price. But don't lose lolly either.. At the other end of the scale you also need to guard against under-valuation of your house – particularly if you intend to negotiate with buyers directly. As cash property buyers we always ask vendors how they arrive at their house valuation. Few if any seem to do their own research. They should. Nine out of ten will reach for the phone and simply call a local estate agent. If there's no well researched valuation in place we go on to produce a "transparent" valuation for them to consider. Well, why wouldn't you? The art of DIY valuation - the only way to safeguard your interests.. It is important to remember that some sellers (and buyers) are especially vulnerable to over-valuations. Don't be one of them. Your property sale is more likely to fall through if it is over-valued in the first place. Think about it. With so many ways to compare property prices buyers may 'cool off' or their lender may fail to value the property at its asking price. Even worse, your house may fail to attract offers. Alternatively, you might end up turning down perfecting reasonable offers! Guidance is at hand.. If you're selling a property soon do take a look at our extensive house selling guide. Our site map is good place to start.  No matter how you plan to sell, our guide will help you get a better price for your property. But for now, more on valuations.. Methods of house valuation Technical talk...but only for a moment.. There are three methods of property or house valuation: cost approach   income approach   comparables approach   The generally accepted method in the residential property market is the comparables method of house valuation. So we are going to focus on that. Most property people (including us) use some form of comparables approach because it is objective. The method does not rely on one person's preferences whether they are a surveyor, agent, buyer or seller. The downside is that it works less well for unusual properties. How to value your house Let's be clear... This is exactly the same approach we would use if we were valuing your house.. We recommend you incorporate most, if not all, these steps into the process you use to research your house valuation and its asking price. Step one  - Research historic prices. This will give you a baseline to bat from.. Get recent online historic data for properties like yours (preferably in your street) using sites like www.ourproperty.co.uk, www.nethouseprices.com and www.mouseprice.com. Although this information will be out of date it will provide you with a baseline of selling prices rather than asking prices. Then fast forward to the current market.. Step two - Speak to local agents about current prices and demand. You can research current asking prices on the web using the likes of Rightmove. But you'll also have to speak to local agents. Local estate agents will be able to talk to you about very recent and current sales and market sentiment. If any estate agents have 'for sale' boards up in the immediate vicinity contact these first. Note that legally speaking, agents cannot reveal how much a property sold for until three months and one day after it sold. But they should be able to comment on the relationship between asking and sold prices. The most comprehensive source of individual house price information can be found at www.landregistry.co.uk and is useful if you want to know the price specific houses sold for. Then bring out the big guns..get professional help for pennies..(almost) Step three - Buy a third party valuation report Invest in a Hometrack Report for your property – this is available at www.hometrack.co.uk. You're not limited to using Hometrack, there are alternatives, but it's robust and well priced. It also has the advantage of being widely available to buyers and sellers. The Hometrack system is widely respected by finance and property professionals including surveyors and some agents who use it as one of the components of their own house valuations. The Hometrack system is a bit like having a team of surveyors working for you.. Why this system? The reports use Realtime™, an automated valuation system used by high street banks and mortgage lenders. If it's good enough for these guys..then it's good enough for us. In most cases the Hometrack system will give you a good indication of a property’s value, something that you can't get from simply looking at previous sales in your area. There are exceptions... Each Hometrack valuation comes with a confidence level of low, medium or high. The more unusual the property or the fewer comparable sales available, the lower the confidence level. However for the vast majority of properties the given price range is an excellent guide. How to use the report.. You then simply use the other information collected in the other steps in the process to establish where your property should be on the range. Depending on the confidence level attached to the reported average price for your property you can weight the report more or less. A Hometrack Online Valuation Report for your property is available for around £20. In our view it is worth every penny. Especially when you consider how much money is at stake. Each report of about 10 pages in length includes essential information on the price of comparable properties in your area and important trends such as the average number of viewings per property and the average time it takes to sell a property in the area. Making sense of the information collected so far.. Does all the information collected so far make sense? You may not be able to explain any anomalies but are you comfortable with the trends? The information you have collected should give you a pretty good idea of a range of likely values for your house valuation. Still want an estate agent's input? An optional step..meet the agents. Step four - Get estate agents valuations Estate agents' input is always an important part of the house valuation process no matter how you plan to sell your home. Only agents are really in tune with local sentiment. Get three estate agents valuations for your property. You'll get better quality information from the agents if you invite them round to view and value your house. Most will give you an opinion on the phone if you approach it the right way..but if you are selling through agents you might as well invite them round.. Milk the meetings.. Use the meetings to grill agents on local market conditions and their experience of selling a house like yours. Having obtained three estate agents valuations the average of these may be the best starting point for establishing an asking price all things being equal. The final selling price is likely to be +/- 5%-10% of this figure depending on demand for your property at a given point in time. For more detail on how to assess agents please return to the estate agents section of this site. In Scotland, where there is a different selling process, the available information is slightly different. As is who you might talk to. But the use of past and present prices is comparable. Hometrack now covers Scotland and further resources are provided in our Directory You're not through yet..one more refinement...but it's  important. Step five - Settling on an initial figure Having collected all your information compare the agents' average valuation to the 'estimated value' thrown up by the Hometrack report. You can anticipate the agents' average valuation will be slightly higher than the Hometrack average. Refer to your other research if the Hometrack report has a low confidence level or appears out of whack with the agent's house valuation. The killer question.. The question to then ask is any difference between the two numbers easily explained by the condition of your property and current demand or the difference between asking and sale prices? Now we need to talk tactics.. Your house valuation - deciding on tactics The psychology of setting asking prices.. Traditionally most asking prices are set with some room for manoeuvre built in to them. It's simply part of the psychology of selling. You can decide if and how you factor this into your tactics for your house sale. If you're looking for a quick sale then your approach will be different to a seller who is simply 'testing the water'. You'd be surprised.. Examples help... For a quick sale undercut the price of similar properties in your street to make your house appear relatively more attractive. The difference doesn't need to be significant. Or you can advertise your house at its open market value but qualify it by adding 'price negotiable' if you want to sell quickly. If you are not in a hurry or feel your asking price is close to the actual valuation or comparable, stick to your guns. Just add the postscript 'no offers'. You can also price your house as 'discounted for quick sale' or 'realistically priced for quick sale'. There are quite a few options to consider. And finally (almost).. Ultimately the final asking price is a judgement call.  But your asking price needs to be based on a house valuation backed up by solid research - and the degree to which you want to sell your house quickly. And in a changing market as we have in July 2007, what do you do when the market starts to slow down? House valuations in Scotland bring their own particular complications.

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