Valuation

lucie_1985

Our flat is being valued by a surveyor this week for an advance for home improvements. The property is a new build (2.5 years old) but has benefitted from price increases in London. I can be pretty secure that there are no damp/subsidence issues etc. so assume that the value is largely based upon sold prices in the area. My worry is that there is a flat that has come up for sale within the block which has a smaller square footage, same number of bedrooms but is a "distressed sale", the price is quite clearly significantly below market value but will this affect my own valuation or do the circumstances discount it?

lucie_1985

In all honesty it's going at a price that if I had the 25% deposit I'd bag it as a BTL - not too hard to manage in the same building!

audigex

The valuer will understand the situation and have seen it before. I've seen two houses in the same street sell for double/half the price of each other, and this won't be a surprise to a valuer.

Location/land value/size will account for a certain minimum amount of the price in any street and sets the baseline "This is what it's worth if it's trashed" level. The condition of the individual property is then the difference between that and the maximum value obtainable on the market.

lucie_1985

Thank you Audigex - from Rightmove the pictures of the flat don't make it look trashed but it does look pretty bleak to say the least, definitely like little care has been taken. It's just hard to get any sort of answers from a surveyor about *how* they value, it all appears to be a bit of a dark art! I realise it's a skilled occupation that I'm not qualified to do but surely the resulting valuation shouldn't ever be a surprise? Especially given the fact that hidden structural issues shouldn't (fingers crossed) be an issue.

Thrugelmir

lucie_1985 wrote: »

My worry is that there is a flat that has come up for sale within the block which has a smaller square footage, same number of bedrooms but is a "distressed sale", the price is quite clearly significantly below market value but will this affect my own valuation or do the circumstances discount it?

How long has the property been on the market?

Market value is what someone will actually pay for a property not the price it's marketed at. So if the price has been lowered that reflects the market in the locality.

lucie_1985

I do realise the difference between asking and sold prices. The property has been on the market for a matter of days but already at a significant discount, c.20% than others of a similar size (asking price vs asking price)

Thrugelmir

lucie_1985 wrote: »

I do realise the difference between asking and sold prices. The property has been on the market for a matter of days but already at a significant discount, c.20% than others of a similar size (asking price vs asking price)

Then early days. If it's as cheap as you say it should go under offer at the weekend.

lucie_1985

I have no doubt it will, however my query is whether or not the distressed nature of the sale is taken into account when valuing properties that aren't in that position