How To Know If You’re Getting A Good Price
- October 14, 2023
- Buying Guide, Life Style, Property, Real Estate
- getting best price of property, properties value, property prices
- 0 Comments
Knowing how to work out how much a property is really worth can help immensely when choosing a property to buy and then making a reasonable offer. After all – no one wants to pay more than they need to!
When looking for a property to buy, it can be easy to take the asking price as the true value of the house/flat. However, although some properties are valued fairly, they can also be under or overvalued when they are put on the market.
To be a savvy homebuyer, it’s important to do your research into what the properties you’re looking at are actually worth, so you know whether it’s worth buying and what an appropriate offer looks like.
This can sound like a daunting task, but luckily, we have broken down our top tips for how to assess a property’s value.
Focus on the local area
When looking at property prices, there are a lot of resources that will tell you what the prices across the UK or its different boroughs are, both currently and what they predict for the future, including our own House Price Forecast. While these can be useful for getting a picture of the market trends, they can actually be misleading when looking to move in a specific area, as prices can vary wildly from place to place, and even street to street.
So, the first thing to do when investigating property prices is to focus only on prices in the area you want to buy. If possible, look down to the individual road that the property you would like to buy is on, and its surrounding roads. This way you’re not going to end up accidentally comparing a house price in Cambridge to a house price in Peterborough.
Don’t just look at what the properties are selling for now – look at sold property prices to see how much they sold for in the last year, this will give you an indication of how well prices hold up on this road or if they can yoyo up and down.
First step – create a range based on the area you want. You may find that prices in the area you want range from £254,000 – £325,000, for example.
What is the market like?
Once you’ve zeroed in on the area you want to live in, you can start looking at property listings (sites such as Rightmove or Zoopla) there. Looking at what properties are on the market for can give you an idea of what sellers will be looking for in an offer.
However, you should make sure to dig a little deeper.
Find out what each property was put on the market for when it was first put up for sale. Then compare this to what the price is now. Is there a trend? Are all of them dropping or increasing in price? Have they all been on the market for a while, or are they all showing as Sold STC?
If prices there are rising, then you know that the value of your desired property is likely to go up, so you might need to put in an offer close or on the asking price, or people may even be offering over the asking price and you may need to do this to avoid it going up even more.
If prices are generally falling, then you might be better off waiting to the property to go down in price so you can put in a lower offer.
If prices are static, then you don’t need to rush or wait, and you could even wait for a new trend to begin.
Typically, in a falling market, around 3 or less properties are sold out of 10. In a static market it’s around 4 / 10 and in a busy market, you are likely to see 5/10 or more properties sold.
Next step: Use what you’ve learnt to adapt your price range from step one. Does understanding the current market move prices towards the lower or higher end of the maximum and minimum you are looking to buy for?
How hot are the properties?
Once you’ve got an idea of the market trend for your chosen area, you can start to get an idea of how in-demand properties in that area are. The higher the demand for a property, the higher its value is likely to be. There are some tricks to seeing how hot a market is, look out for:
How often properties go up for sale – when looking at listings, it should show you the date that a given property came onto the market. Using this you can see how often a property in the area will go on sale. If there is a large gap between properties going on sale, you can infer that new properties won’t come on the market very often, so demand for a home in the area will could be high. If new properties are regularly being added to portals, it’s going to be easier to move there, driving value down.
Another way to work out how quickly a property on a particular road might sell is to have a look at sold property price data. This will give you an idea of how often a property is likely to come up for sale. Is it one or two a year or was the last time a property sold on that street over 5 years ago?
How many houses have sold – when searching listings, you should be able to include in your search any houses that have recently sold or are under offer. From here, search again without including these and see how many properties are left. If the number has gone down significantly, you know that houses are selling well in the area. If the number barely changes you can see that people are finding it harder to sell, meaning there may be less demand, and you could get a good deal.
Whether you’ve got your eye on a specific property or not, it’s always important to compare multiple properties in the area. Not all homes are going to be on the market for the same amount, so you should try and figure out what makes some more expensive, or cheaper than others.
Look for features that you think will add or take away value from a home. For example, one property on a street might have a bay window, while another does not. This may be why its asking price is higher than the other. One property may have a smaller garden than another, which prices it lower. Another may have a much better layout, open plan kitchen, a conservatory, en-suite bedrooms, lots of factors affect the final price of the property.
Find out the most expensive property and the least expensive in the area to get a good scale of value (remember to look at both properties that are selling and those that have sold). See what features a property you like does and doesn’t have compared to these properties and try to work out what represents good value for the type of property you are ideally looking for, checking both marketing and sold property price information.
Visit the area
Our final piece of advice, and perhaps the most important, is to try and visit the area and the outside of a property in person if you can before you view This is because pictures a webpage can only tell you so much about a property and the area it is located and how the property ‘feels’ when you visit.
When you visit the area, walk around the roads you are looking to buy on or near and try and pick up on anything that you think may have an impact on property value. Look at things like how busy the roads are, whether it’s located near any noisy or busy buildings, like pubs, shops and factories.
It may also be close to locations that add value, for example being close to a school can be very valuable for those looking to buy with a family (if you are not, someone with kids might be willing to outbid you for the home), although it’s also worth checking what parking is like during school hours – it can be nightmare for neighbours!
After you’ve done all your research it’s time to decide on what you think the value of your desired home really is. Perhaps the asking price seems fair based on the area and property features. Or maybe you’ve realised you can bid under by a significant amount. It’s time to pull out that price range you’ve created and use that as a guide.
When an agent gives you the price the seller wants for the property, or your surveyor suggests a value, (a conveyancer wouldn’t normally comment on price) an offer, you don’t have to blindly agree. Your research and your estimate can help you decide whether you are being asked for the right amount, and what to make as a counter offer.
You can always present your evidence and discuss with them how they came to their number. Remember you are the buyer, and you should only pay what you are comfortable with. Don’t be afraid to negotiate on your offer! And always make any offers in writing and subject to an independent survey.
A note on how the market impacts pricing
It’s important to bear in mind that the true value of a property is what someone is willing to pay for it and what the seller is willing and able to accept.
So whilst you may have identified an appropriate price based on location and features (and a mortgage lender would probably agree with you), if an external market factor (like a Stamp Duty Holiday) comes along, it may start a buying spree that pushes up prices.
Ultimately, if someone is a cash buyer who can afford to pay over the appropriate price, that can impact prices locally. Depending on market conditions, you may be faced with paying more than you should if you really want the home.
Don’t be forced into paying more than you can afford or stretching your budget – keep an eye on market trends and alternate areas to look for a great deal.