Mortgages.scot

Valuers use a variety of ways to determine the value of a property. But generally, each takes information from four broad elements. That is not to say that is all they use, but as a starting point the following are key and I will break each one of them down further.

• Location
• Size
• Condition
• Selling price of other properties

So lets break each of those down and look more closely at each one.

Location

Location matters. A good example is where I live in East Renfrewshire. Considered the most affluent area in Scotland. As great as that sounds, it's covering a big area. On Rightmove today the cheapest property is a 2-bed flat for £55,000 and the most expensive is a 6-bed detached at £1.75m. Clearly location matters, one is in the most affluent part of the area and the other, well, isn't. Or to make the comparison more fair. A 2-bed flat in the more affluent part of the area will set you back around £400k at the higher end vs. the £55k flat already mentioned above.

The land value in the more desirable part of the area is going to be much higher. Even if you built the exact same 3-bed detached property at one side as you do the other, the purchase price difference will be significant simply due to the value of the land.

Other factors are also important when it comes to location. In a street lined with identical houses, one may be in a better spot than some of the others. A better outlook, south facing which makes the back garden have the sun for longer. These things can be important to buyers and they will pay more for the property that offers more.

How close the property is to transport links, shops and so on. Schools are an important one, is the property within the catchment area of a better performing school or the not so well performing one. I have seen streets with big differences in pricing for no other reason than it is divided by the catchment for two schools with vastly different positions in the league table.

Size

Size matters. In a row of identical houses the one with an extension taking the floor space from say 505 Sq.ft to 550 Sq.ft can add 10's of thousands to the asking price as well as provide more space. A bigger garden can also have a significant impact on many buyers.

Condition

Condition matters. Again, two identical houses on the same street, one that needs a lot of work before you can move in due to poor maintenance vs. the one that has been recently upgraded to a high standard will have very different asking prices.

Good quality fittings, a recent boiler install vs. one that needs to be replaced, a good program of general maintenance over the years, and mature, well-tended gardens, these all matter to varying degrees depending on the buyers.

Selling price of other properties

Valuers depend a lot on what other properties are selling for so that matters. If 3 properties of near identical spec to the one they are looking at have sold recently for around £400k then expect them to value in that area. Unless there is something the current property offers the others don't then it won't be valued higher than what buyers are currently paying.

Difficulty Factor

When a valuer has other properties that have sold in the street or immediate area the job of valuing the property is much easier for them. Location, condition, size and other factors are easily comparable and can be used to set a value.

When valuing a property that is more remote or unique then that becomes more of a challenge. With little to no comparable properties, it becomes more difficult and that is really where a valuer with the right experience matters in order to set the correct asking price for a property.

Even in a street of properties that all started in the same size and layout, over time owners have extended and changed each property and they may all have benefits another does not.

So for the most part, valuing property has a fairly standard, repeatable method of getting to a figure. Whether the owner agrees is something different. Some don't. That is why valuation reports include comparable properties that were used to compare what is being sold with what has been sold. The valuer will comment on why they are comparable where differences exist, what they are and how they impact the value.

Let me know your experiences

I am really interested in hearing about your experiences where a valuer has not offered a figure you were happy with and if you challenged it, what was the outcome? Did you get it changed? Had the valuer missed something? Let me know.