Interesting house valuations

[PollyPerky]

We had our house valued last week out of interest. Might move if we see something we like. I've kept an eye on prices where we live for some time as well as doing some research on Nationwide House price thingy, Zoopla etc. We've been here a long time and had a valuation about 7 years ago, by the same EA, and the value was what I'd expect. They are a reputable EA (as much as the b...s can be) and the guy who came lives in the same village so ought to know his stuff.

Anyhoo- our neighbours are just putting their house on the market and for 35% less than ours was valued at. I was horrified (so were they but they want a quick sale.)

They have a smaller garden , slightly different position, (we are in a small cul de sac) and our is the better house in terms of position and possibly improvements. However, there is a difference in price of over £120K. I feel a bit gutted because if we do try to sell, buyers will wonder why ours is so much more than the one that will- presumably- sell very quickly at such a low price.

Would you query it with the agent?

[namechangedtoday15]

Do you mean query your valuation? Its pretty meaningless to be honest, I think one EA's opinion is an indication - but only that. I think its probably wrong to be honest - I wouldn't say the differences between your house and your neighbour's house as you've listed them warrant the differential. I think your neighbour is likely to have got 2 or 3 agents round and if they all said about the same ball park figure, even allowing for the desire to sell quickly, it does sound as though your valuation is too high.

And yes, I would be upset if I'd previously thought my house was worth more - it is likely to be something potential buyers of your house will be able to see (and adjust their offers accordingly) if you do decide to sell.

[PollyPerky]

The thing is, our valuation makes more sense, even taking my rosy coloured specs off.
We had it valued by the same ES about 10 years ago, so today's value reflects the rise in the SE and corresponds to what Nationwide suggests (in fact NW suggest more.) It puts it on a par with other similar houses in our village. I honestly think the neighbours house- which is being marketed for very little more than our opposite neighbour was selling for 7 years ago, is wrong and they've been told to put it at that price because they want a quick sale. Theirs can't be worth just £20K more than the other neighbours was 7 years ago.

[Mintyy]

I would do your neighbours a favour and strongly encourage them to have a few more valuations! There's pricing it accordingly if you want a quick sale, and then there's being a mug and practically giving the house away ...

[PollyPerky]

I agree! But the issue is we are worried about the impact on any future sales of ours.

[namechangedtoday15]

Do you know that they only got one valuation?

[sparechange]

A house is worth what people will pay for it. If they have genuinely undervalued their house, they'll have buyers queuing up, and could be in a position to go to sealed bids.

If it is genuinely undervalued by 35% and they want a quick sale, they might want to consider an auction or buying company, because that is the sort of discount they usually expect in return for a quick sale.

[Mintyy]

Yes, I know exactly why you are worried Polly. But what can you do about it other than try and persuade them to get a few more valuations and put it on for a bit more? I'm not really sure what you are asking for here.

[sofato5miles]

There could be a bidding war

[wowfudge]

Ime valuations on Zoopla are way off the mark.

[hereandtherex]

EA know nothing.
They look at stuff thats sold and make up a figure.
Its that simple.

The problem fro a lot of places outside the M25 is that there has been so few transaction that no one is 100% what a reasonable price is anymore. There's no real price discovery.

Look at the local job market. Work out what the salary is. Anything more than 6 times the average salary is pushing it and risks being on the EA books for years.

[hereandtherex]

Have a look at actual sold data for you area:

houseprices.io/

[ThroughThickAndThin01]

Why wouldnt you tell them what yours was valued for, in the hope that they get some more valuations to confirm or reassess the price?

I'm not sure what you are asking here either, if it isn't to get that advice.

[ThroughThickAndThin01]

It would put me off buying yours once I rightmoved sold prices and saw your neighbour had sold recently at 35% less than you are expecting me to offer. Speak to your neighbour!

[Skippedthelightfandango]

its not a valuation you had, it is an EA telling you what they think you can sell it for. The valuation is what you get from a surveyor.

There is a huge difference. One is a professional the other is the equivalent of a used car salesman

[namechangedtoday15]

Just out of interest, albeit that house price index data is based on (in your case) SE data and not your little pocket of the SE, prices fell by around 24% between the end of 2007 and the spring of 2009. Apparently, prices have risen since spring 2009 by 32%. So very roughly, prices (according to the Halifax for the SE as a whole) are about 8% ahead of prices at the end of 2007.

That doesn't sound too far off what your neighbours are pricing it at?

[Mintyy]

A lot of ignorance about house valuations on this thread.

Yes, they are entirely based on comparables - EAs look at other similar houses that have very recently sold in the area and come up with a value for your house based on that.

EAs know more about local house prices than surveyors. Surveyors doing valuations for mortgage companies often, infact usually, phone up their EA mates to check on local prices.

And, as we all know perfectly well now, valuing houses is an inexact science, the asking price is a guide price only.

[namechangedtoday15]

Mintyy I think there is obviously some misunderstanding of what a surveyor does. A valuation for mortgage purposes uses completed sales information of comparable properties (usually 3) and whilst it is actually a good idea to speak to local agents etc, a surveyor faces a professional negligence claim if they don't do their job properly. The same can hardly be said for an estate agent who sets a sale price at an unrealistic level. An estate agent will no doubt inflate a figure expecting to get lower offers or set it low to generate a bidding war. Neither is based on actual value with any accuracy.

[Mintyy]

I don't think I am misunderstanding anything.

What percentage of vendors seek the opinion of a surveyor when putting their house on the market? 0.01% I would guess.

Estate Agents are as good as anyone else at giving advice on marketing prices for houses. If they weren't, why would anyone use them?

[ThroughThickAndThin01]

namechanged surveyors often ring estate agents up after they've surveyed for comparables therefore being guided by agents valuations.

Therfore, in general, and certainly at the outset, estate agents valuations are key.

[namechangedtoday15]

Actually I don't agree through. Surveyors comparables for mortgage purposes have to be completed sales so an estate agents "knowledge" of *selling prices" is pretty much irrelevant. A surveyor is only interested in what they sold for, not what they were marketed at. An estate agent might be able to tell a surveyor which houses have been on the market (for example because there is sometimes a lapse between completion and publication of sold prices).

Mintyy that's exactly my point - I agree no one contacts a surveyor. What I was saying is completed sales are a better indication of value than an estate agent's "let's put it on the market for x" figure. I think we may have different opinions of estate agents .

[ThroughThickAndThin01]

Anyone can find info about the price sales competed at. I'm not really understanding your point. Surveyors survey after houses are agreed at particular prices; estate agents value first and are the first port of call in pricing.

[Mintyy]

And I am saying that Estate Agents based their valuations on what other properties have sold for, not what they are on the market for. In the days before that information was available online for everyone to see (although there is usually a 2 to 3 month gap after completion), the Estate Agents would phone each other and talk about sold prices for comparison prices. At least they did in the four different Estate Agencies I have worked in.

Estate Agents very often get their estimates wrong, but I am sure it can't be a little bit of over-enthusiasm accounting for the £120,000 difference between the value which has been suggested for op's property and the price currently being asked by her neighbours.

[ThroughThickAndThin01]

Namechnager, Also it is the estate agents who hold lists of applicants and should be well aware of who will pay how much for particular houses, roads, areas. And what other agents are selling properties for in the same area. Surveyors may down value, but with enough evidence of similar properties selling at the same amount or higher, this should be adjusted up.

That's the whole reason the op is rightly worried. If her neighbour sells substantially lower than what she couldachieve for her own house it leaves her own achievable price floundering.

[namechangedtoday15]

We seem to have gone off on a tangent! I was trying to query what the OP had suggested in her original post, that her house is worth (or should go on the market for) £120,000 more than a neighbour is selling for, and then her subsequent point that it can't only be £20,000 more than another neighbour's sale price 7 years ago. A few people immediately (it seemed) wanted to suggest that the neighbour's selling price was wrong, rather than the OP's opinion of value.

And then it all got a bit of a bun fight about whether a surveyor knows best or an estate agent does.

I was just suggesting that a "sold" price is a better indication of value than any for sale price, or opinion of an estate agent. It might therefore be that the neighbours are more realistic than the OP, depending what advice they have had about their sale price.