Estate agent valuation

[Lucycantdance]

We live overseas and are considering selling our house in the U.K. (currently rented out) to buy here. Had an estate agent valuation, it’s way below what we thought it might be. The HPI has it at £637k and zoopla etc all £600k and over. EA was 100k plus below that.

I haven’t sold before in the U.K. so am probably totally clueless - but are EA valuations generally pretty accurate?

Ignore Zoopla. It has no grounding in reality, as it doesn't take local factors into account.

Best thing to do is get a few valuations and see what comes from it. We found that all 4 were very similar for us.

Zoopla is not very accurate at all.

I would get 3 EA valuations to get a better idea of what the property is worth. Though bear in mind that they tend to value on the high side, to see if you can sell at a high price (or just to win the business).

Even EA valuations aren't accurate.

At this price level you could get three and they would be £100k apart.

Then the seller thinks the highest one is the most accurate.

What have similar houses in the vicinity sold for recently (which may be quite different to the prices of the unsold ones on the market).

I would say EAs value on the high side. Have you checked what similar properties have sold for recently, rather than the asking price?

Prices are a bit tricky at the minute, but get a few quotes the EA may be pricing a bit low if you are out of the country and he can make a quick deal (I had an EA trying to sell a house cheap to a friend). But may just be the current market.

EA's valuation will be much more accurate if they have done their jobs properly. Also they will know if they at what price they should be able to sell it at. No point overvaluing it if it won't budge.

Has the estate agent valued it with sitting tenants?

Get another estate agent round. See where they sit in the range. Probably get a third valuation too.

EA probably more acurate than Zoopla.

As others have said - no to Zoopla.

We recently had valuations from 3 different EA in a small UK city. They were 1) £325,000, 2) £365,000 and 3) £435,000. Zoopla was at £510,000.

Wow that's helpful thanks. For reference we bought it for 485k in Jan 2020 and we got a good deal then - the man selling had higher offers but stuck with us. It got snapped up and we were nearly gazumped. The EA selling to us told us that she had quotes from EAs above 500k plus.

God it's a minefield. Did not realise zoopla was so inaccurate, what about the HPI?

Will get some more EA valuations.

Be more specific on the type of house/postcode and people will be able to advise more.

If you bought for that price 3.5 years ago, a valuation of £500-£550k sounds about right.

I'd get 2 more agents in to value, but I suspect you'll need to manage your expectations down from £600k, given the current climate and state of the market.

in all honesty, this is what i think sellers should be doing:

you should look at the average salary in your area and see that as a guide, using the current 6% interest rate. once you've calculated that over a 30 year term with a 20% deposit, ask yourself if people (buyers) can truly afford that? keep lowering your price until you can see a monthly mortgage repayment that makes sense and is affordable.

if you were expecting your house to be £635k in the current market with 6% interest rate, 30 year term with a 20% deposit then that monthly figure is outrageous for many.

the only way most sellers will sell their house is by dropping their price to meet people's wages, which have been stagnant for years.

good luck

Look at nethousepricessold.com and see what other houses in same postcode sold for.

Lol - this is not how a house is valued or how would any houses be valued at 1M plus?

There are so many variables. Sometimes people earn more than the average salary (or less), have equity from previous properties, sometimes they have way more than a 20% deposit.

If a house is valued in the region of 635k by 3 EAs then the seller can assume it will sell for about 635k (probably about 10% less in a Buyers market like this one) - they don't have to do imaginary sums in their head guessing all sorts of factors about the buyer. You're living in a fantasy world if you think that is how valuations should be done.

My recommendation is to get three ‘valuations’ and then ask each EA: ‘now forget what you’ve just said. What asking price will get viewers through the door in the first week?’

The actual value is decided by the market, but viewers are put off by high asking prices. You won’t get any offers if you don’t get viewers, so that’s what your objective should be when setting an asking price.

It's not likley to be worth much more than you paid unfortunately. First thing to do is to give the tenants notice. Then once it's empty you need to look again at getting it valued. With tenants in situ offers are likley to be few and low...

Agree with @DrySherry that if you still have tenants in the property, your first step should be to give them notice.

It's not easy to sell a property with tenants in situ as people worry that they will refuse to leave when it comes to it. Solicitors will advise their clients not to Exchange on a property until the tenants have left and if they are there during viewings, it will affect the price you are able to achieve.

What now? That’s not how it works. You don’t price homes to the average income. Give over.

What @NewFriendlyLadybird and @DrySherry said.

Zoopla is only useful as a guide if lots of similar houses very nearby have sold in recent years, and it takes a long time to react to falling market conditions.

It's not that hard to value most houses. You look at similar houses around and what they sold for, then add a premium based on how the general market in that area has risen/fallen since the sales. You can normally factor in extras if houses differ significantly from others in the area - ie bigger garden, just done up new kitchen etc.

It is true to say some houses are more unique and can be difficult to value, first because there is nothing comparable in the area and second because there have not been any sales around for a long time - 20 years +.

In general from my experience if you get 3 agents to value a house they will normally come in on an average price +/- 10%. A difficult to value house might be more variation.

What you market it at also depends on how fast you want a sale. Sometimes people price high, then lower the price until they find someone who will buy. However you have to be careful of this strategy at the moment because the market is generally falling so you may end up chasing the market down if your reductions are not aggressive enough. Another strategy might be to market it as offers over a price at the low end of what you think is it's valuation. I would be clear that my EA contract stated I was not obliged to take an offer though. It depends on how quick you want the money.

As for Zoopla, I have just evaluated my house and I think it is overvaluing the average value (as it gives high/low limits) by 10% atm. It is a rough guide, not an absolute, and is likely to be out of date in what is a dynamic market atm.

well then no one is going to buy OP's house in this current market then are they lol. people who were looking for properties in the £500-650k two years ago (like OP themselves) could afford them on the lower 1% interest, but today OP will be finding that in this price range, these same buyers are either purchasing cheaper properties or flats, or sitting and waiting it out. everyone knows there will be a MAJOR price correction, even crash and OP is best advised to see what is happening in the market with buyers and their affordability. unemployment has also gone up in the UK/england and we are in a non-technical recession, heading for a technical recession. it's buyers who are laughing. it's a buyer's market.

OP also stated they got there house for around £485k or something similar in an earlier post in 2020 lol. it is delusional - at best - to believe it is £635k today. as someone already above said, the EA who quoted OP about the value of £535k (even less) sounds about right, and even then, it's overpriced given the current interest rate. another 2 EAs will say the same. the EA knows the buyer will negotiate less.

Based on my way of working out the value of the property, it aligns with the EAs thoughts that OP used. Your method sounds more like a guessing game to me. On the contrary, I use 'affordability' as the biggest factor because that's what the housing market is always based on: what buyer's can afford.

Or, OP could just list the property at £635k and wait many many months with lots of reductions appearing via PropertyLog that buyer's can see and will sit on. That will definitely not help it sell.

ultimately, in Sep 2023, prices have now dropped down to 2020 level and this is the reality sellers are having to face. i've been seeing it everywhere. it's just going to get worse for sellers.

It’s pointless debating with someone who doesn’t understand the property market. Buyers aren’t laughing if they can’t find anywhere to buy because being delusional can affect buyers & sellers

the buyers you are seeing right now are those who need to buy or need to upsize (in a chain situation) due to a growing family - they are in a different position to the ones who will finally appear when the biggest price correction we will ever see in this country's history, followed by a crash. good buyers don't want to go into negative equity. they are sitting on this.

what is there to debate exactly? you are just saying the same as me which is get an EA to check the value - the EAs work out different factors and one major one is affordability. OP said themselves they bought the property for 485k at a lower interest rate, but it's now worth the same as in 2020 at 6% interest rate. it's simple math tbf. two more EAs will say the same (as me). so i'm not sure what your point is really?

it's just common sense to work out what average people's salaries are now and seeing if they can even afford the £635k OP hopes to get the house for. some buyers have deposits up to 20% max (most only have 15%) now. they can't afford those prices. personally, if i had a higher deposit, i wouldn't buy a house that i believe will go further down in price (my thinking would be: i worked hard to save up for that I'd rather sit it out).

you can keep on thinking that the boom from the last two years is still ongoing, but it isn't. it's over. it's been over since Spring 2023.

Ea value high usually,so get a few and then knock £10000 off

Just because you got a deal when you bought it doesn’t mean the house is valued at that price plus an increase now.

Disregard zoopla. It’s an autogenerated website with no idea if you’ve extended your property or it’s back to the 1950s.