I live in the United kingdom, consequently I know only too well that the common query: How Much is My House Worth can be very hard to answer.
The simple truth is a house is only worth what a buyer is prepared to pay. The question of whether or not this is true for a house’s value when the home owner doesn’t wish to sell is similar to the quandary of whether a tree felled in an empty wood still makes a sound.
This is exactly the same with almost everything; some jewellery may be valued at £2,000 for insurance purposes, nevertheless it may fetch nowhere near that at market, and even less in a pawn shop. It is even more difficult when it comes to valuing property because there are many more factors to consider, as will be explained below.
But, How Much Is My House Worth? There must be a way or ways to at least get an idea? You’re right, there are:
Obviously you could just ask 3 estate agents to come to your house and value it. The problem is that estate agents are wel know to inflate the value of a property in order to win instructions. That’s fine however, unless i have my own idea (and logical theory) as to how much my house is worth, I am not going to be able to challenge the estate agents’ figure.
Due to a lack of properties coming to the market we’ve seen property values increase dramatically as a result of an inbalance of supply and demand. So to answer the question how much is my house worth; I really need to do some detailed research.
That said: I decided the best place to start my research would be online. In the UK there are two banks (Halifax & Nationwide) that publish house price indicies however, we also have an institution called The Land Registary and amongst other things they keep a record of all the prices that property actually sold for. This is very useful data because “sold” prices represent the “true” market value, whereas estate agent’s asking prices simply reflect a property’s “hope” value.
In needing free online house valuations, my starting point was to have a look at The Land Registry data available. This informed me as to just how much homes in my area have been selling for since 2006, organised by “property type”. Next I went to the Nationwide property value calculator and used it to see how much property values in my region had changed over time.
This research gave me a excellent starting point, but for the real answer to the question of, “How Much is my House Worth?” I sitll needed to hit the streets, the estate agents, as well as online property portals such as Rightmove, to uncover how many properties like ours there are for sale. When you attempt this little research exersize, pay particular attention as to whether there’s a shortage of supply for your type of property. If your property exceptional and in a good area, then you can afford to ask a little more than the local average. On the other hand, if you need to sell property fast and have an average property, which has lots of competition will need to be priced at either the local average or lower in order to find a buyer and as such have any value.
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