Understanding valuations and offers

zpargo

 Hi 
How do valuations work. An independent expert presumably provides a value for the property and then the vendor puts property for sale based on this? 
Does the expert specify a range typically or is it a single value?
I expect that vendors look to put it up for sale for much much more than what the property is valued at by expert? (I guess there's nothing stopping them from doing that) 
Thanks

AdrianC

Somebody owns a house. They want to sell the house.
They go round the local estate agents, and ask them how much they think it'll sell for.
They find one they like, and hire them.
The EA advertise it.
The ad has a price on it. Maybe it's got some woo-woo wording next to it.

Potential buyers see the ad, view, and one (or more) like it enough to place an offer.
The vendor then decides to accept or reject that offer.
If there's more than one person making an offer, game on!

If the buyer needs a mortgage, the lender want to know if it's good security for the loan.
An independent surveyor whose credentials the lender trusts gives their opinion on the value.
The lender then base their loan-to-value on that, if it's lower than the buyer's accepted offer.

There's no rocket science. Just a few people's opinions of what it's worth. Some of them do it for a living. Everybody has different objectives in stating a number.

Ain't no point in putting a number in the ad that's so high you scare the horses. That just means nobody asks about viewing...

eddddy

In general (in England and Wales), it works like this:
A potential seller gets 2 or 3 estate agents to look at their property and the estate agents suggest what the asking price the property should be advertised at.

Sometimes the estate agents suggest the same amount, sometimes they suggest different amounts. Sometimes they suggest a very high figure, in order to impress the seller into giving them the business.

Usually, buyers would offer a bit below the asking price, and the sellers would agree. But recently, in some areas, it seems that buyers are offering over asking price.

paulj2021

I’ve found ( in my limited experience) that EAs like to price things these days according to the price bands on listing sites such as Rightmove, which go up in 25k steps. So, if they think a property is worth 230k they will list it at 250k to catch buyers who put a minimum of 250k in their search preferences. Maybe this is one reason why prices are leaping up so much recently?

Redwino222

Where I am estate agents will suggest marketing  below what they think it’s worth to get people through the door.  This generates too much interest and causes bidding wars.  Unhelpful but that’s how it always plays out. 

badger09

The aspirations of the vendor also comes into play. Some have a figure in mind, which is what they ‘need’ in order to move up the ladder. Sometimes this is totally unrealistic and bears no resemblance to what their house is worth. 

Which is basically what someone is prepared, and able, to pay for it. 

youth_leader

I think my buyer deliberately went for a mortgage on my listed property, as he knew it would be valued low due to the renovations needed. 

zpargo

AdrianC said:

Somebody owns a house. They want to sell the house.
They go round the local estate agents, and ask them how much they think it'll sell for.
They find one they like, and hire them.
The EA advertise it.
The ad has a price on it. Maybe it's got some woo-woo wording next to it.

Potential buyers see the ad, view, and one (or more) like it enough to place an offer.
The vendor then decides to accept or reject that offer.
If there's more than one person making an offer, game on!

If the buyer needs a mortgage, the lender want to know if it's good security for the loan.
An independent surveyor whose credentials the lender trusts gives their opinion on the value.
The lender then base their loan-to-value on that, if it's lower than the buyer's accepted offer.

There's no rocket science. Just a few people's opinions of what it's worth. Some of them do it for a living. Everybody has different objectives in stating a number.

Ain't no point in putting a number in the ad that's so high you scare the horses. That just means nobody asks about viewing...

Thanks for this - it really helps. I saw one house with an asking price of 60k more than similar property (terrace) in same post code with same beds sold just a year ago. Makes me wonder. 

AdrianC

zpargo said:

AdrianC said:

Somebody owns a house. They want to sell the house.
They go round the local estate agents, and ask them how much they think it'll sell for.
They find one they like, and hire them.
The EA advertise it.
The ad has a price on it. Maybe it's got some woo-woo wording next to it.

Potential buyers see the ad, view, and one (or more) like it enough to place an offer.
The vendor then decides to accept or reject that offer.
If there's more than one person making an offer, game on!

If the buyer needs a mortgage, the lender want to know if it's good security for the loan.
An independent surveyor whose credentials the lender trusts gives their opinion on the value.
The lender then base their loan-to-value on that, if it's lower than the buyer's accepted offer.

There's no rocket science. Just a few people's opinions of what it's worth. Some of them do it for a living. Everybody has different objectives in stating a number.

Ain't no point in putting a number in the ad that's so high you scare the horses. That just means nobody asks about viewing...

Thanks for this - it really helps. I saw one house with an asking price of 60k more than similar property (terrace) in same post code with same beds sold just a year ago. Makes me wonder. 

There was either something you were missing, or one of them was going to be unsold for a very long while.

jimbog

zpargo said:

AdrianC said:

Somebody owns a house. They want to sell the house.
They go round the local estate agents, and ask them how much they think it'll sell for.
They find one they like, and hire them.
The EA advertise it.
The ad has a price on it. Maybe it's got some woo-woo wording next to it.

Potential buyers see the ad, view, and one (or more) like it enough to place an offer.
The vendor then decides to accept or reject that offer.
If there's more than one person making an offer, game on!

If the buyer needs a mortgage, the lender want to know if it's good security for the loan.
An independent surveyor whose credentials the lender trusts gives their opinion on the value.
The lender then base their loan-to-value on that, if it's lower than the buyer's accepted offer.

There's no rocket science. Just a few people's opinions of what it's worth. Some of them do it for a living. Everybody has different objectives in stating a number.

Ain't no point in putting a number in the ad that's so high you scare the horses. That just means nobody asks about viewing...

Thanks for this - it really helps. I saw one house with an asking price of 60k more than similar property (terrace) in same post code with same beds sold just a year ago. Makes me wonder. 

Can you post the rightmove links and we can check them out?