So you’ve done the right thing and asked for three estate agents to value your house before you put it on the market. But their valuations vary by quite a lot. You may be left wondering why valuations vary by so much and which valuation do you go for.
So why do estate agents valuations vary so much? Estate agents valuations vary so much because some estate agents value according to sold comparables, whilst others value purely to get the listing. But also bear in mind that valuing houses is not an exact science and does require some degree of experience and local knowledge of the area.
It’s right to get at least three estate agents to value your house. But when faced with the dilemma of three very different valuations it’s tricky.
Home owners often like the idea of going for the highest value. It’s that hope of getting an extra few thousand in the bank. But you may be kicking in the foot by doing so, so please read on to find out why this could be a huge mistake.
Are estate agents valuations accurate?
It’s true to say that estate agents valuations cannot necessarily be regarded as accurate, because the true value of a house is what a willing buyer is prepared to pay.
But also estate agents don’t earn a commission if you go to their competitor and may over price your house to entice you to signed their contract.
What should you do if you have three valuations that vary by so much?
If you have estate agent valuations that vary by so much, you should do your own homework and look at other similar houses for sale in your location and look at sold comparables.
Once you have a better understanding of your home’s true value from your own research, use the estate agent that is closest to this value.
You’ll find sold comparables on sites like Rightmove and Zoopla. Use the following links below to enter your postcode to help discover what your house is worth.
- How much is your house worth on Rightmove: Search with your postcode.
- House prices and values on Zoopla: Search sold house prices and estimates for any UK property.
- Find Sold House Prices In Your Area on Nethouseprices: Search with your postcode.
Focus on properties that have sold within the last six months. It’s okay to take account of similar house for sale, but make sure to check the date of first listing.
In other words don’t compare the listing price of a similar house that’s been on the market for over six months. In truth the only reason a house like this hasn’t sold is because it’s over priced.
If you get stuck on this because the listing on Rightmove has recently had a price change, I explain about how a very useful Chrome Extension uncovers the original listing price in this article: Can you see how many times a property has been viewed on Rightmove. The link jumps to the heading: “Can you see price history on Rightmove?“
Ask the estate agent for their own sold comparables
Don’t necessarily discount the highest valuation right away. Speak with each estate agent and ask why they chose the valuation they did. Ask each estate agent for sold comparables for similar properties.
But don’t take their word for it, ask to see the details of houses they’ve actually sold. Ask them to explain any wild discrepancies. If in doubt choose an estate agent who seems to be talking sense over valuation. Go with your gut.
What to do if there have been no sales of similar houses in your location
What do you do if you look on one of the above property sites and search your postcode, but you fail to find similar sold houses within the last six months.
Firstly, as already mentioned you can look at other similar properties that are for sale in your location. Making sure to look at the listing date and how long each property has been on the market.
You can also look slightly outside your street, but keep to within 1/4 of a mile of your location. But also stay within your town or village.
Look for similar sized properties with the same number of bedrooms, bathrooms and living rooms. Plus check the size of garden and whether it has a garage or not.
If you can’t find similar houses for sale in your area, this may be a good thing. This is certainly true if there are buyers looking for your type of house specifically in this location.
Valuation differences may be because your house is a one-off house
If your house is a one-off style of home it’s much more difficult to place a value on it. It’s true that all similar three-bed detached houses with a garage and a same sized garden in the same location will have a similar valuation.
But what if the design is totally different for your home. Or what if your house is located on the edge of a beautiful lake or overlooking the sea? There could be other characteristics to your home that sets it apart.
This will always make it more difficult to value. Houses with a specific design that’s different to the norm can either work for or against the sale. It just depends on whether there’s a buyer who likes similar taste.
How many estate agents should you ask to value your house?
When you have your house valued by estate agents before you put it on the market to sell you should ask at least three agents to value your home.
The reason for three is to take account of the differences of opinion and to weed-out estate agents who value houses purely as a marketing exercise and to get the listing.
Do estate agents overvalue properties?
Less scrupulous estate agents overvalue properties as a ploy to get the listing as they rely on the fact that many sellers would always want to sell their house for more.
But this can backfire on the seller, especially if they want to sell quickly, as an over priced house won’t sell and they’ll be locked into contract.
What tends to happen is after there’s no viewings or the viewings you get don’t turn into offers, the unscrupulous estate agent will suggest a price reduction. The price reduction is often to the true valuation of the house or what it should have been listed for in the first place.
This valuation might have been put forward by one of the other more honest estate agents. But now you’re locked into contract, and if you need to sell, you may not have a choice other than to reduce the price with your current agent.
But be careful with this, as buyers are also wary of houses with a price reductions too.
How do you know which estate agent to choose and which valuation to use?
When you’ve received three estate agent’s valuations on your house that vary by more than 10-15% you should rely on your own research to weed-out those valuations that are over what your house is truly worth.
If in doubt you should take an average of the three valuations you have.
But then go for the estate agent you feel will sell your house by looking at other sold boards in your location.
Which valuation do you use and which EA do you instruct
Be careful not to fall for the highest estate agent’s valuation if it’s not correct. Over priced houses usually don’t sell. Houses that are priced out of the market in this way linger on the market. In the end buyers avoid these listings.
Rightly or wrongly, buyers tend to think there’s something wrong with the property, as they see the listing week-in, week-out. Houses of this nature attract the type of buyer who’s looking for a bargain.
What are the consequences of going with the highest value?
Savvy house buyers or investors strategically search for properties listed for more than six months. They will then often place cheeky offers knowing full well that the seller may be getting fed up of their house not selling.
It’s a fact that the longer a house is listed on the market, the higher the percentage below market value it achieves.
What do estate agents do when they value your house?
When an estate agent values your house they should do the following:
- Visit your house.
- Measure the rooms.
- Review the interior and exterior condition of the house.
- Check the size of the garden.
- Check what out buildings you have including a garage.
- Look at sold comparables of other similar properties in your location.
- Consider the strength of the market.
However, whether all estate agents cover the above list when they value a house is debateable. If you don’t get the impression the estate agent is taking your listing seriously, avoid then and opt for a more professional agent.
The other thing to bear in mind is that a good estate agent will use their experience of the area. They will likely already know what your house is worth, which is a bit like most home owners generally know roughly what their home is worth.
But estate agents are doing this day-in-day out and should have a better idea of what houses are worth.
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