The Importance of Valuations for Sellers, Buyers and Landlords

When you’re selling your home in and around Newcastle-under-Lyme, the term “property valuation” seems like just another part of the process. But what exactly does it mean?

In this article we’ll explore what a property valuation involves and the different factors that can influence the worth placed on your home.

What is a Property Valuation and Why Do They Matter?

A property valuation is an assessment of the monetary worth or market value of a property. It should be conducted by a qualified professional who will use various methods to determine the fair and accurate value of a property at a given point in time. This valuation serves as a crucial benchmark for buyers, sellers, lenders, landlords and other stakeholders involved. An accurate valuation can empower you to make more informed decisions, ensuring transparency and fairness in property transactions.

FOR SELLERS

As a seller, the decision to put your property on the market is a big one, and determining the right asking price is so important. A valuation provides you with an objective assessment based on factors such as location, condition and comparable sales. By getting an accurate valuation, you can set a competitive listing price that reflects your home’s worth and maximises the chance of attracting potential buyers.

If you get a few valuations it can tempting to go with the highest suggested value. However, pricing a property too high can deter prospective buyers and prolong its time on the market. Equally, pricing too low can result in a missed opportunity to get the most from your investment. It’s all about striking the right balance.

FOR BUYERS

Property valuations are equally crucial when you’re buying a property as they provide essential insights into its fair market value. An accurate valuation can also empower you during negotiation discussions, providing a solid foundation for making competitive offers and negotiating favourable terms.

If you’re purchasing a property with a mortgage, then your mortgage lender will want to conduct their own independent valuation as part of the approval process. Essentially, they’re checking that the amount you’ve agreed to pay is accurate, allowing them to calculate the loan-to-value ratio.

FOR LANDLORDS

Property valuations serve as a benchmark, allowing you to assess the rental potential of a property. As a landlord, it enables you to find the right balance between profitability and market demand. You’re also more informed to make strategic decisions about upgrades, renovations and how much maintenance a property will need.

Like when purchasing a residential property, your buy-to-let mortgage lender will want to conduct their own valuation to ensure that the rental income you’re proposing is achievable.

What Influences the Value of Your Property?

There are multiple different factors that shape the value of your property:

Location: Location plays a big part in determining the value of a property. In and around Newcastle-under-Lyme and Stoke there are locations to suit everyone, whether it’s city dwelling or country living you’re after. Factors such as amenities, transport links, schools and local market trends all influence the price people will pay.

Property Characteristics – Size, layout, age, architectural style and overall condition will be carefully assessed during the valuation process.

Market Trends – Property valuations are influenced by broader market trends, not just those which affect our local Newcastle area. The economic conditions, interest rates and supply and demand dynamics all play a part.

Comparative Market Analysis – This involves analysing recent sales of similar properties in the area to determine a property’s value based on comparable market data.

Income Potential – For landlords, the potential income generated by the property will also be factored into the valuation process.

Myths about Property Valuations

There are a few myths about property valuations that are important to address:

“Location isn’t important” – This simply isn’t true, the location of a property plays a big part in what someone is willing to pay for it, hence why it impacts the valuation. We’ve all head the phrase location, location, location!

“Put it on for the highest price possible and be haggled down” – There is some truth to this, of course you want to get the most possible for your home. However, if you price it too high you simply won’t get the interest, and your property will languish on the market and inevitably be reduced to a more realistic figure. Also if it is on the market for a long time buyers will naturally be a bit more wary, even when you reduce your asking price – hence the importance of being realistic.

“The value of home improvements increases the value of the property” – This can sometimes be true but isn’t guaranteed. If you pay an amount for an extension, it’s not guaranteed to increase the value of your home by the same amount, or more. It depends on all the factors above to reach a realistic valuation. If you are considering home improvements it’s always worth asking Heywoods for advise on those which are likely to add value and those which may not. We’ll always be happy to help.

Our Approach to Valuations

When you’re thinking of selling, we’ll give you an honest valuation, and advise you on how to make the very best of your property. 

Heywoods is right here at the heart of the community, where you can drop in and talk to real, local people face to face. If you want advice, just come in and talk to us, or you can book a valuation on our website right now and we’ll be round to see you soon!