What’s My House Worth?
What’s my house worth?
If you are like most of us, your house is your biggest investment and most valuable asset. Just how much is that asset worth – and will you get a good return on your investment? There are various reasons why it is important to understand your home’s value and have a figure in mind. Why? And how do you determine value?
Why a Valuation Is a Good Idea
Why is it so important to know what your home is worth?
- When selling. When you want or need to sell your house, knowing the value is key. This is critical information in setting a reasonable asking price. While you obviously want to maximise your profits, you don’t want to go so high that you turn off potential and viable buyers – and risk your house sitting on the market for months. Likewise, you don’t want to price so low that you do not realise the returns you need on your investment.
- When remortgaging. When remortgaging, your lender will need to know the value of your home; this plays a big role in their decision as it indicates the level of risk they will be taking. And one thing we know about lenders: they don’t like big risks when it comes to properties!
- When trying to calculate the return on home improvements. Understanding your home’s worth is also important when considering certain home improvements. For example, will an extensive kitchen remodel be worth it in terms of the cost versus the potential return when it comes time to sell?
Now that we know the ‘why’ involved in knowing your home’s worth, it’s time to discuss the ‘how’? How do you determine value?
Let’s start with an easy, free and typically very accurate method – sounds good, right! Ask two to three (preferably three) estate agents to visit your property as you wish to start the process of selling. They will come, look around and use their extensive industry knowledge and insight to develop a valuation. Professionals should do this as a complementary feature; after all, it is their chance to scope out the property and pitch you their services.
Ask that they provide you with two quotes:
- The highest price for which you could sell your house
- The price that would generate the most attention amongst buyers
Make sure that you are under no obligation to use the estate agents’ services; this should be a no-pressure situation. Rather, you are gathering essential information in order to make the best decision for you, your needs and your goals. Again, remember, setting an asking price that is high can be a sign of confidence – but it can also create stagnancy in terms of your listing. If you go a bit lower, there is a chance you could start a bidding war – but you could also turn off some buyers who fear it’s too good of a deal and something must be wrong with the house.
It is a delicate balancing act to be sure. Another factor with this method of which to be aware: some agents are… well, pushy. They may use heavy-handed sales tactics that can be quite intimidating. Be prepared to stand your ground, thank them for their input and tell them you’ll be in touch.
Another easy, free method of determining your home’s worth is to use online calculators. These are great but be aware that they will not be as accurate as a valuation by an estate agent or other industry professional. That said, resources like Rightmove or Zoopla are convenient and simple to use. Enter your postcode, number of bedrooms, type of property (i.e. flat or house) and price range to see similar properties on the market.
This won’t be apples to apples, so to speak, because you have to consider factors such as your home’s more unique features, its condition, etc. But do be sure to look at how long similar properties have been on the market and whether they have had any price reductions.
Other resources to check out:
- The UK House Price Index from the Land Registry
Knowing what your house is worth is crucial to an efficient, effective sale that positions you to take the next steps in your journey.