Valuing Your Home

There are a variety of reasons why home owners may need a proper valuation of their house. It could be for insurance, tax (capital gains, inheritance or probate), or accounting purposes. Home owners may also want their property to be valued for portfolio and asset valuation or matrimonial asset division. In all of the above instances, the valuation needs to be done professionally by a surveyor registered with the Royal Institute of Chartered Surveyors.


There is another, more common reason why home owners may want to value their house – they plan to sell their house. Before a house can be sold, home owners must first determine its value. If they want a fast house sale, probably the most important criteria is a good and accurate appraisal of the value of the house. Wrongly valued properties could deter potential buyers or cause financial losses to the home owners themselves.

Accurate home valuation leads to more money. Image courtesy of Wikimedia Commons.


So how can you accurately appraise and determine the value of your home?


Hiring a Surveyor


The most accurate method is by hiring a professional surveyor. They will utilise a wide range of dataset, including, but not limited to:


• Initial purchase price

• Economic condition

• National and regional property price

• Condition of property

• Nearby infrastructure and amenities (schools, park, post offices, shopping malls, etc.)

• Road connectivity and utility


However, surveyors cost money, and scheduling may be an issue, especially in urgent cases. In addition, a surveyor’s valuation is not permanent. Some firms recommend a fresh appraisal to be made every six months. Banks, when processing a loan application (particularly for expensive property), might even request valuations that are not older than three months. If your house takes too long to sell, you might need to hire surveyors repeatedly.


Some are also concerned that surveyors tend to conservative, and lean towards the lower range of valuation.


So what’s the alternative?


Valuation by Real Estate Agent


Most buyers don’t really scrutinise the sales prices of homes. They usually ‘trust’ the amount listed, and if the amount is too expensive, they will just move on to the next house. Owing to this, estate agents are compelled to price houses under their portfolio competitively.


As such, home owners can actually get an informal evaluation of their home from real estate agents. Their valuations are not definitive, but they do take into account the prices of homes in the neighbourhood, past sales amount, repair costs of incoming owners, etc.


The best part is, estate agents don’t charge for their appraisal – they want your business after all, and they will only earn money if your property is sold. So their appraisals are usually reliable. However, to give you some peace of mind, and ensure that you are not being short-changed, you can also ask for multiple evaluations from a few different agencies (not too many though, since agents sometimes solicit each other’s opinions). Assuming the discrepancy is small, you can just pick the median or mode figure. Easy-peasy, right?