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If you are selling a property, you'll normally want to achieve the best possible price for it. But what exactly is any property worth?
Well, the answer is a straightforward one. The value of any property is dictated by the marketplace - basically, it's worth what someone will actually pay you for it.
Not rocket science I know, but let's give you a simple example. Suppose you are selling a property for £200,000 in a small village in Cornwall. There are a few other properties on the market like yours at similar prices.
You now learn on the 'jungle grapevine' that a famous celebrity has just purchased a property in your village. Suddenly, lots of people want to move to your area and are prepared to pay more for a property there, so property prices increase.
But property prices can go in the other direction too. Returning to our Cornish property example, imagine the effect on local property prices if a nuclear power plant was going to be built next door?
Initially property prices may drop, as few people would want to live next to a nuclear power plant! However, the new plant will have lots of staff and some will want the convenience of living locally, so property prices may well return to their previous levels or even increase based on demand.
As we've seen, property prices are very much based on supply and demand. Bearing that in mind, here's how you can easily find out what your property is worth and should be marketed for. |
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| Property professionals use several methods to come up with a valuation for a property. It should be noted that these methods will only provide an approximate valuation. After all, no two properties are totally identical and will have slight differences - for example location and standard of internal decoration.
Let's look at some of these methods and show you how to find a valuation for yours. |
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| In the UK, the Land Registry keeps a record of the actual prices that properties have been sold for, together with other relevant information like the type of property and date of the sale.
If properties similar to yours have sold recently, you'll be able to discover the actual selling prices.This alone should give you a very good indication of what yours is worth.
If you visit the Land Registry website, you can purchase this information for £2 per property. Better still, you can get the same information for free by visiting our friends at Hometrack who are experts in property valuation and use the same information from the Land Registry. |
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| It may sound obvious, but it can be a very worthwhile exercise to pretend that you are a buyer and hunt for properties for sale in your area that are like yours. By doing this, you'll get a feel for the price range that similar properties are being marketed for.
The easiest way of doing this is by searching an online property search portal like Property Panther.
By spending a few minutes, you'll soon get a 'feel' for the competition and will also be able to adjust your selling price accordingly. For example, let's say that you are selling a 4 bed detached property and have noticed that one like yours has just sold for £265,000 in your area.
Both properties have similar features, but yours has the added benefit of a conservatory and a double garage. These features may well add another £10,000 to the price you can achieve, so you'll probably be looking at selling for say £275,000. |
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| You can get a very rough valuation for your property by taking the price that you paid for it, and then adjusting it (or indexing) to allow for general increases in property prices in your region.
The easiest way to do this is by visiting Nationwide's House Price Calculator, and typing in the price you paid for your property together with the date of purchase.
It should be noted that this will only provide a 'guestimate' valuation which could be inaccurate as Nationwide's index only uses an average property growth rate which is based on large regions of the UK.
For example, one region in Nationwide's index is Greater London. In 2005, some areas of Greater London benefited from exceptional increases in property prices, whilst they took a nose-dive in other areas.
If property prices in one half of London increased by 20% whilst they dropped by 10% in the other half, the Nationwide index would show that property prices increased on average across London by 5% which could be extremely misleading - so use this tool with caution! |
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| For a more accurate indication of the value of your property, consider obtaining a professional online property valuation report such as that provided by Hometrack.
The Hometrack system uses a very advanced computer model to value properties. It is used by the majority of UK High Street Banks and Mortgage Lenders, as well as lots of estate agents! Many different factors are taken into account, so it is much more specific than the Nationwide valuation tool. For example, information is based on individual postcodes and property types rather than enormous regions.
In addition to providing an online property valuation, Hometrack reports also contain a wealth of other useful information including: neighbourhood price ranges, current property values based on property types, neighbourhood price trends, historic sales prices and local market trends.
Of all the property valuations available, we feel that a Hometrack Property Valuation Report should provide you with the most accurate indication of what your property is actually worth. |
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| Please note that using any of the above valuation methods will only provide you with an indication of what your property may actually be worth based on 'real' data. The actual sales price that you ultimately achieve may vary from this based on both market and property conditions in your area.
Having said that, all the above methods are far more accurate than simply 'picking a figure out of the air', as they are based on both historic and current property sales information. |
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