Most homeowners have some idea of what they think their property is worth; they check out the property websites and look at what similar properties are priced for in the area.
But, when it comes to speaking to a lender for either refinancing or purchasing the property, the valuation of the property is often different.
A property may have different valuations and appraisals depending on who’s giving it, and here are the reasons why:
Your own valuation
When it comes to selling, we all have a ‘wish price’ (and we usually secretly hope it goes for more than expected). Looking at the other end of the scale, in our experience, we often meet property sellers who say ‘I won’t accept less than’ a certain amount.
Unfortunately, it doesn’t always work like that. For instance, if people have made expensive renovations such as a new kitchen or additions such as a pool, sometimes the cost of the renovation or addition doesn’t always translate into the expected massive increase in dollars at the sale.
The financial provider’s valuation
If you’re buying a property and need to borrow money or are refinancing, the financial provider will need to give a valuation for internal purposes to determine how much it is prepared to lend you. This valuation is often lower than a property agent’s valuation, sometimes as much as 20 %.
This is because the lender will want to recoup its money should something go wrong with your repayments – and very often, they’ll want to do it quickly. The lender will also factor in the additional expenses that come with selling the property such as real estate commissions, legal fees and other associated fees. This all adds to the lower valuation as ultimately, it doesn’t want to be out of pocket should something go wrong.
The agent’s appraisal
A good agent who knows the area will always give you an honest appraisal going on what the current market is dictating. As well as the size and condition of your property, it will also look at other features such as the suburb, and the proximity to schools and amenities.
The agent’s appraisal is a guide to how much your property may get, and it will usually give you a range of how much it expects to sell for.
What the market dictates
Ultimately, the money you get in your pocket for your property is what someone else is willing to pay for it. Some properties go for far more than first appraised because properties are in short supply in a desired suburb. If there are enthusiastic bidders at auctions, again, your property may surpass appraisal expectations.
And if you’ve worked to make your property presentable by tidying up the garden, giving it a lick of paint and decluttering, the chances are you’ve made it that bit more attractive to buyers and they may offer a bit more.
If you’re thinking of selling your property, or even just want an appraisal, come and talk to us. We are one of Newcastle’s longest established real estate offices and our innovative team is constantly achieving great results for our clients.
Drop into the Cardiff office or give us a call on 02 4954 8833. Or send us an email to: firstname.lastname@example.org – we’d love to hear from you.
And don’t forget to check out our Facebook page for handy tips on selling your property or what to look for when buying a property.