What is included in valuing a house?

[Auramigraine]

Hi all

Sorry posting on here for traffic, I live in a rented house (private) landlord wants to sell it and we want to buy it so it is going to be valued this week.

I desperately want to buy it, was talking to next door and they might be selling and got a price, now their price that has come back is more than we could afford, but they have done a lot of work to it (made it open plan, new kitchen,french doors to the back, new bathroom) etc. Now our house has a kitchen that is bright green cupboards (no idea how old) hinges are falling off and have, but we have modernised them with covers so unless you open them you can’t tell, walls are all in need of plastering but you can’t tell unless you look for it (all painted) we replaced the bath panel from a very old wooden one so again bathroom looks modernised, boiler is about 20 years old and needs replacing, it makes banging noises. Sorry I’m babbling, basically what I’m asking is, does things like old boiler, old kitchen/bathroom, walls in need of plastering etc affect the price?

Should add he had it valued about two years ago and it was £20,000 less than the price next door have recently had for there’s...... can the house price have gone up £20 grand in two years on ours? If it comes back similar to its price two years ago we should be fine because we have done nothing but save a substantial deposit since then.

Please be gentle, I’m so nervous I can’t sleep, this house is down the road from our kids school and I really don’t want to loose it. I’m so nervous xx

The value of the other house will have taken their refurbishment works into account yes. They could easily have spent 20-30k to have a new kitchen, bathroom and other bits and bobs done.
Just because the valuer has put it at this new price it still may sell for lower. and that could then reduce the next valuation on your property.
I'd suggest you make a point of calculating all the works costs you would need to do to put your house in a similar state and use this as a negotiation tool when speaking to your landlord. they will also consider the fact they can save money on any estate agent fees by selling directly to you.

Any valuation, is, in effect, a "guess" from the Estate Agent as to what they think someone would pay if it were sold on the open market.

It isn't uncommon for Estate Agents to 'overestimate' what they think it will actually fetch, to persuade the vendors to put it on the market with them, and then, once they've signed a contract, to let it sit for a while and then advise the vendor to drop the price.

Whatever you do, you should get 3 or 4 estate agents round, to compare what they all say.

Even if they come to an 'average' price, you don't have to offer that amount. It will be quite difficult for the owner to sell it with sitting tenants - if they sell to you it is a a HUGE advantage to them in terms of a definite sale, rather than having to give you notice, then put it on the market then 'hope' to find someone that will pay that price, so you may be able to get it at a lower price than the estate agents are suggesting.

In terms of the condition of the property, then yes, things like the age of the boiler and the condition of the fabric of the building, do affect the price, but the biggest factors are the location and the footprint of the house.

I wouldn't say cosmetic changes like open plan, new kitchen, french doors to the back, new bathroom etc will add much to the price (some people like the changes, some people don't). They do make it more sellable but its the number of rooms, size, location etc that affect the price.

I would definitely expect the value to have gone up in 2 years. Consider approaching the owner for a private sale. He might accept a lower price if he can save on the agents fees etc

You should get a tiny reduction for new boiler.

However with the Brexit uncertainty the market is very stagnant, the seller would need to give you notice to leave before anyone would consider exchanging contracts and the seller would not have estate agents fees to pay if they sell to you. I think you are in a good position to negotiate a deal.

You/landlord could get a valuation from a RICS surveyor. Obv cost money but they have professional regulation, etc.

If I sold to a tenant, my letting agent would take a % fee, same as an estate agent. It's in our contracts.

Thanks all for your advice, very helpful. He has already said he is willing to give me a discount of 5 or 6 grand as a gesture of goodwill from whatever price it comes back as. I have just googled the phone number that rang me to arrange the estimate and it is a surveyor company not an estate agents, is that better or not? Xx

it means it will be based on actual sold prices for comparables not just an estate agents guess.

Sorry to be a pain I’ve just had a quick look at houses that have sold in the area and the ones like mine are of a price we can afford but they have thrown up a lot of new build houses in the area, would they compare new build prices as well? They are a lot more than we could afford :( mine is an old housing association house I think, maybe about 40 years old xx

Hi OP,

They'll use houses that are comparable to yours - so size, location, condition etc. A new build in a different location is a totally different house to yours.

Don't panic!

From my experience new builds have a huge premium attached. I recently bought a three bed 1920s semi. I can't afford the new build 2 beds in our area which are priced £50k higher. Often to take into account people part exchanging, so don't worry about the new builds. Good luck!

If anything, the presence of new build houses should reduce the price of your house as it means greater supply and probably more attractive and saleable new houses.
Not sure about a surveying company as a valuer. Could you get one or more agents round yourself to give you a value?
Of course if the number your landlord comes up with is acceptable to you that's great and you don't need to do any more!
It's good of the landlord to offer you a discount, but remember if he can sell privately to you he will save himself thousands in fees and also a lot of time and hassle. So there's plenty of incentive for him to offer you a fair deal.
If he doesn't sell to you sounds like he would have to do work if he wanted to get top dollar anyway.

Are those kitchen cupboard door covers easily removable? If so, I’d do that before the valuer comes around.

Op l am a LL and if l sold to an existing tenant l would be delighted because

1. I would have no gap between rent payments and selling
2. I would save 1-2% on estate agent fees
3. I would have certainty, no empty house hoping for a buyer costing me money.

That puts YOU ina strong position to negotiate with your Landlord, don't waste that or just take the discount he says he is giving you, do your own research.

Get on rightmove and firnd all the sold prices for your postcode and compare to your house, focus on location/square footage/condition of house/number of bathrooms/size of garden/garage and drive.

Check when they sold.
Depending on where in the country you are, many places have dropped in value this yearby up to 5% (south East)
North mostly static, some small increases 2-3% in Manchester and liverpool.
Google house price movements this year for your area, and reference to the date of the sold prices for any similar homes on Rightmove.

ie If a 2 bed in your street sold for 200K in 2017 and you are in a dropping market area knock 5% off your estimate.

Also keep in mind with Brexit uncertainty the outlook is very poor for house prices going forward. Good for you as a buyer.

New builds usually fetch a 20% premium over an identical older house ( by identical l mean size and location) so knock 20% off the cost of the new builds near you to get a rough idea....

Don't forget your advantages just because you want it....negotiate hard you are in a strong position, and can always go up..