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How to actually find out the value of your home and it is not how you might think.

When deciding on your home's marketing price or value, the obvious thing to do is ask an estate agent. After all, they're the experts, aren't they? They can tell you exactly how much your home is worth. But, in reality, no one really knows as there is no crystal ball on if someone will buy at that price - or is there?
How to actually find out the value of your home and it is not how you might think.
When deciding on your home's marketing price or value, the obvious thing to do is ask an estate agent. After all, they're the experts, aren't they? They can tell you exactly how much your home is worth.

But, in reality, no one really knows. There is no crystal ball.

When an estate agent visits your home, they research other recently sold properties in the area. They compare those properties to yours and adjust the suggested price accordingly. So perhaps you have a bigger garden, or they don't have a garage, for example, they'll add a bit on or take a bit off depending on the pros and cons of the property.

But, a premium property is usually one of a kind. You aren't trying to sell a house on an estate with 30 other similar properties, are you? So how can they compare a recently sold property to yours if there aren't any?

A standard property valuation is nothing more than the agent's best estimate of what they could get a buyer to pay for the property.

The agents can't give you an exact price for your home because, as the saying goes, a property is worth as much as someone is willing to pay, and lets' be honest, they're not handing over the cash. So, what do they do instead? They guess.

There is no right or wrong answer; it's their opinion. And everyone has a different view. An agent with a long list of buyers that may be potentially interested will estimate a higher sale price than an agent with none.

But they don't have a crystal ball. They can gather as much information about similar properties and the market, but it's still their opinion.

And every seller has an opinion too. All homeowners think they know what their home is worth. Why wouldn't you? It's your most valuable asset, after all. The estate agent's aim is to ensure that their estimate and yours are the same. Often the agent who confirms that your estimate is correct or tells you that they can sell your home for more is usually the one who wins the business.

But massaging the ego of the homeowners to blindly agree with their own valuation is not providing any advice or market insight, and it's unlikely to get the job done.

Imagine an agent comes to value your home, and rather than guessing the value, they searched their nationwide database to see if any buyers would be interested in your property at the price you'd like to try. If you get a buyer, great, you've got a fantastic price for your home. But if you don't get a buyer at this price, there's no harm done. You can adjust the marketing price and take the property to the open market.

It's actually so critical to test the market - here's why.

Finding a buyer before you publish your property on the open market is the best way to achieve the highest price. The buyers that will offer at this stage will be the keenest - your property is their perfect home, and they'll pay a premium price to secure it.

Once you go live on the property websites, you're starting an imaginary clock. The timeline begins for you to get a buyer within 4 weeks- the time it takes for the interest levels in a property to drop on the property websites. After this, the only way to build interest again is to reduce the price.

Of course, a price reduction is no big problem. Companies offer discounts on products all the time. But with property, particularly when you're marketing online, you must reduce the price to a new price bracket.

Property websites allow searches within set price brackets and show all properties at that price. By the time you are ready to reduce, you've exhausted all buyers within that bracket, so you now need to find new people to show the property to. The point of a price reduction is to bring your home into the search criteria of a new selection of buyers. Meaning you need to get into a new price bracket.

At the lower end of the market, these brackets increase in £10k increments, so realistically you could shave £10k off the price and hit an entirely new market.

But, £10k isn't going to make any difference to the higher end of the market where incremental changes are every £250k. If you're on the market for over £2m, it increases to £500k increments.

So, if you post the property straight onto Rightmove without first testing to see if there are any interested buyers at that property value, you're on a ticking clock, potentially losing you £500k!

An expensive mistake to make.

Instead, after agreeing on a price, your agent can test for you to see how it sits with the keenest buyers. If there are no takers from these buyers at this price, the open market won't be interested either. Then, without costing you a penny, you can reassess. Perhaps decide on a different pricing strategy and try again.

Or maybe there are interested parties, and your pricing strategy is decided. You allow your 'off-market' VIP buyers to come and view. You receive an offer from a motivated buyer at the highest possible price because they don't want you to go on the open market.

Traditionally, agents rush to get a property onto the websites as this is their only way to promote the home to new buyers. But buyer psychology and how we search for a new home have changed.

With flexible working options, people that work in senior roles are now more geographically mobile than ever before. They can live where they choose to, not where they have to for work. And advances in technology have changed property searches - long gone are the days when you actually visit an estate agent's office. In fact, many estate agencies are coming off the high street altogether in favour of business parks and serviced offices.

Tech savvy, wealthy, and geographically mobile buyers will also not have the time, nor the inclination, to sit on an evening scouring websites to find a home. They want speed, efficiency and convenience. And what is more convenient than your home finding them?

Using revolutionary software and AI, By Design agents have the option to test your property value on these buyers before the price reduction clock starts ticking!

The property websites are scraping the bottom of the buyer barrel and should be considered the last resort after all other potential buyers have been shown the property.

If you're considering moving and having your property valued, get in touch now. We can show how we pinpoint your buyer and test the market with your pricing strategy, potentially saving you £500k.

(Photo by Nicole Avagliano on Unsplash)