determining house value

Grimbal

How do you know how much a house is "worth"? I know that's a bit of a non-question, and it's only ever worth what someone is willing to pay for it, but if you ARE that someone, how do you work out how much you're willing to spend (budget allowing obviously) ?!

We have our eye on a particular house & wondered if anyone knew of any good online tools to find out any information about it before we approach the Estate Agents? We've used Property Bee and found out that it's been on the market for a year, during which time it's been substantially reduced. We can't obviously offer more than we can afford, but wondered if there were any other tools out there that may strengthen a case for making a very cheeky offer?

TIA

Liz

sonastin

websites like zoopla, mouseprices, nethouseprices, home.co.uk etc all give information to help you determine what a house is "worth". The best guide is what other similar houses in the local area have actually sold for recently. The estimated valuations on those sites can be wildly off (higher or lower - there's no rule of thumb) but you can input a bit more detail about the house to try to improve the accuracy.

nollag2006

Great post here:
http://forums.moneysavingexpert.com/showthread.html?t=1907059

Cannon_Fodder

Compare to recent, similar sale prices in the area, www.houseprices.co.uk

Use Rightmove Price Comparison http://www.rightmove.co.uk/house-value.html to check what else is on the market of the same type etc. Also shows what property has left the market, that may not yet show up on the sold prices, or was withdrawn from the market.

princeofpounds

Relative comparisons to properties in the same area is the main method.

You can also attempt an absolute valuation through more sophisticated financial techniques like a discounted cashflow model (don't ask!) but these sorts of things are rarely done for anything except large commercial properties. The nearest approximation would be looking at the rental rates for similar assets and dividing by an appropriate rental yield.

Fiddlestick

Grimbal wrote: »

but wondered if there were any other tools out there that may strengthen a case for making a very cheeky offer?

If you aren't embarrassed making your initial offer, you are offering too much

Grimbal

Thank you all for your very useful replies. I've taken a look at some of the sites - Zoopla seems to be saying that it's "worth" a bit more than it's on for, but I'm aware that this figure is based upon a simple calculation from previous sale prices. The comparison to other houses in the road is also a bit tricky as it's one of those roads with lots of different type of houses!

However,

Fiddlestick wrote: »

If you aren't embarrassed making your initial offer, you are offering too much

this made me giggle, as I would definitely feel very very embarrassed about offering what I could afford for this place ! Must be a good sign then

tyllwyd

I think it is a bit academic - you can do all the research you like to work out what you think the house is worth, but unless the owners are willing to sell it to you at that price, it won't make a blind bit of difference. If I was the owner, just because someone came waving printouts from the internet I wouldn't be any more inclined to sell them (maybe less because they would put my back up). I'd make a decision based on my own opinion of the local market, and my own situation.

So I'd say don't make a song and dance about the research, make what you think is a fair offer and see what happens.

Grimbal

I agree, the vendors have no obligation to sell at any price. However, I do think tools like property bee are useful to gauge the possible frame of mind of a vendor! The absolute most we could afford is still a looooong way below asking price, so I have no expectations that any offer from us would be looked on favourably at all & fully expect them to continue marketing!