House valuation

badger09

steve866 said:

badger09 said:

thegentleway said:

K_S said:

@thegentleway If it is genuinely undervalued (and I have anecdotally heard of EAs using this as a tactic to spark a bidding war), you can be pretty sure that the level of demand will ensure that the final accepted offer will be significantly higher than asking and closer to the actual value of the property.

Thank you. I'm pretty confident it will sell for significantly more that asking, just trying to work out what the actual value is.

That’s impossible to say. 

The actual value of any property is what someone, who can afford to buy it, thinks it’s worth to them. If necessary, being able to fund any shortfall between that figure & what their lender thinks is it’s value. 

Those figures will vary between potential buyers, & may bear no relation to what the vendor thinks it’s value is. 

Sorry, I realise that’s not helpful but there simply is no single ‘actual value’. 

Isn’t the ‘actual value’ what a surveyor / bank would value the property at, and anyone willing to pay over the odds is paying above the ‘actual value’?

IMO, no. 

Those of us in the fortunate position of being mortgage free, don’t always know (& some clearly don’t care) what a surveyor/bank would value the property at because they don’t consult a surveyor & don’t need a bank. 

They offer & pay what the property is worth to them. Which, again IMO, is therefore the ‘actual value’ of the property at that time.

thegentleway

K_S said:

thegentleway said:

K_S said:

@thegentleway If it is genuinely undervalued (and I have anecdotally heard of EAs using this as a tactic to spark a bidding war), you can be pretty sure that the level of demand will ensure that the final accepted offer will be significantly higher than asking and closer to the actual value of the property.

Thank you. I'm pretty confident it will sell for significantly more that asking, just trying to work out what the actual value is.

@thegentleway Personally I use a combination of Mouseprice, recent sold comparables and Nationwide indexation uplifts (if the comparables aren't particularly recent) to get an approximate value.

Great, thank you. My friend also spoke to an estate agent who said he went round the property and valued it at £850k so a lot more confident it was massively undervalued.

movilogo

A house is worth what someone wants to pay for it. Sometimes EAs get it right and property get sold quickly. Many times EAs overvalue it and property remains on market for long until price is reduced to present at value proposition to prospective buyers.
A bank does not value a property - it only checks whether it is worth lending you the money you asked for as a security. If bank thinks answer is "no" it then down values, else if it thinks "yes" it does not provide any further valuation number.

As someone already said, intentionally marketing a property too low is to encourage bidding war which is bad for buyers. 

thegentleway

canaldumidi said:

Based on what you've said, the actual value is £763,998.

Now, supposing you buy it at your " offer way over asking price",will you spend the next 5 years kicking yourself for over-paying, or feel glad to have bought your home?

Or suppose you reduce your offer, and get outbid, will you be kicking yourself for not paying more and buying it?

Sorry, how did you come up with that number?

In answer to your question, I would regret paying way over the actual value and be happy to let someone bid way over; they obviously want it more than me. The problem is that the EA massively undervalued the property making me feel like I was paying way over the odds.

thegentleway

steve866 said:

badger09 said:

thegentleway said:

K_S said:

@thegentleway If it is genuinely undervalued (and I have anecdotally heard of EAs using this as a tactic to spark a bidding war), you can be pretty sure that the level of demand will ensure that the final accepted offer will be significantly higher than asking and closer to the actual value of the property.

Thank you. I'm pretty confident it will sell for significantly more that asking, just trying to work out what the actual value is.

That’s impossible to say. 

The actual value of any property is what someone, who can afford to buy it, thinks it’s worth to them. If necessary, being able to fund any shortfall between that figure & what their lender thinks is it’s value. 

Those figures will vary between potential buyers, & may bear no relation to what the vendor thinks it’s value is. 

Sorry, I realise that’s not helpful but there simply is no single ‘actual value’. 

Isn’t the ‘actual value’ what a surveyor / bank would value the property at, and anyone willing to pay over the odds is paying above the ‘actual value’?

Thanks Steve, this is what I meant by actual value. Apologies if that's not the correct terminology.

K_S

steve866 said:

badger09 said:

thegentleway said:

K_S said:

@thegentleway If it is genuinely undervalued (and I have anecdotally heard of EAs using this as a tactic to spark a bidding war), you can be pretty sure that the level of demand will ensure that the final accepted offer will be significantly higher than asking and closer to the actual value of the property.

Thank you. I'm pretty confident it will sell for significantly more that asking, just trying to work out what the actual value is.

That’s impossible to say. 

The actual value of any property is what someone, who can afford to buy it, thinks it’s worth to them. If necessary, being able to fund any shortfall between that figure & what their lender thinks is it’s value. 

Those figures will vary between potential buyers, & may bear no relation to what the vendor thinks it’s value is. 

Sorry, I realise that’s not helpful but there simply is no single ‘actual value’. 

Isn’t the ‘actual value’ what a surveyor / bank would value the property at, and anyone willing to pay over the odds is paying above the ‘actual value’?

@steve866 That does sound logical. However, in practice two mainstream lenders might value the same property at materially different amounts a short while apart. For example 310k with Nationwide a week ago and 350k with Santander today. I'd like to say that this kind of variance is uncommon but it isn't.

Much as we might think that valuers have access to other data, in large part they go off information that you and I have access to.

steve866

badger09 said:

steve866 said:

badger09 said:

thegentleway said:

K_S said:

@thegentleway If it is genuinely undervalued (and I have anecdotally heard of EAs using this as a tactic to spark a bidding war), you can be pretty sure that the level of demand will ensure that the final accepted offer will be significantly higher than asking and closer to the actual value of the property.

Thank you. I'm pretty confident it will sell for significantly more that asking, just trying to work out what the actual value is.

That’s impossible to say. 

The actual value of any property is what someone, who can afford to buy it, thinks it’s worth to them. If necessary, being able to fund any shortfall between that figure & what their lender thinks is it’s value. 

Those figures will vary between potential buyers, & may bear no relation to what the vendor thinks it’s value is. 

Sorry, I realise that’s not helpful but there simply is no single ‘actual value’. 

Isn’t the ‘actual value’ what a surveyor / bank would value the property at, and anyone willing to pay over the odds is paying above the ‘actual value’?

IMO, no. 

Those of us in the fortunate position of being mortgage free, don’t always know (& some clearly don’t care) what a surveyor/bank would value the property at because they don’t consult a surveyor & don’t need a bank. 

They offer & pay what the property is worth to them. Which, again IMO, is therefore the ‘actual value’ of the property at that time.

I’m genuinely intrigued if there was any generally accepted definition of ‘actual value’ or similar. Your opinion and justification seems valid, but others will have a different opinion. 

canaldumidi

thegentleway said:

canaldumidi said:

Based on what you've said, the actual value is £763,998.

Now, supposing you buy it at your " offer way over asking price",will you spend the next 5 years kicking yourself for over-paying, or feel glad to have bought your home?

Or suppose you reduce your offer, and get outbid, will you be kicking yourself for not paying more and buying it?

Sorry, how did you come up with that number?

In answer to your question, I would regret paying way over the actual value and be happy to let someone bid way over; they obviously want it more than me. T..

But you don't know what the 'actual value' is (other than my tongue-in-cheek quote above, designed to demonstrate such a value is only known when a property actually sells).

My real question was about how you would feel about losing out/living there, and thinking you'd done the right/wrong thing.

markin

If you post it, we will soon find the 'Value' and if the is a reason it was under valued.

Rumana03

Does the person who goes to do the valuation know what price has been agreed by the vendor and buyer? Sorry just curious as I have the valuation being done tomorrow & I'm a bit nervous it may come out lower.