Many people believe that valuing a property is art. We disagree. It is mostly rules driven and therefore any inteligent person can do it as long as those rules and methodology are adhered to!
As these results can be replicated, it qualifies as science more than art.
So what rules must surveyors follow to value most residential properties?
How do surveyors do it?
An average surveyor employed by a large company typically conducts 6-7 surveys every day. Then he has to return to the office, write a valuation report which is then sent to the mortgage company.
6-7 surveys per day mean that each property is allocated about an hour on average, including researching the area, sold price comparables in the close vicinity, physical inspection of the property as well as travelling to and from the dwelling and then writing a report for your mortgage company. Just one hour!
No wonder it is a stressful job!
To help improve their productivity, companies provide their surveyors with certain essential tools of the trade – a laptop, connection to Internet and a special modelling software – which is indispensible.
How does this modelling software work?
While conducting visual inspection, surveyors fill in a form (or record into their dictaphone) to capture details like number of rooms in the property, room sizes, number of bathrooms, garage/s, garden sizes, roof type and/or any unique characteristics (e.g. thatched roof, swiming pool, electric gates etc).
At the end of the day they return to their office, input all these details into the software. This software then downloads the prices of sold property in that postcode from land registry. It also downloads data from the Office of National Statistics, the Department of Communities and Local Government etc to arrive at the base value of an average property in that area.
If property has unique features like extended garage, additional bathroom or bedroom or a bigger garden etc, then a percentage value associated with that feature for that area is automatically added to the base price. However if a standard feature is missing then a percentage value is taken out.
Then the software suggests the value range for that property – which covers it to be in below average to excellent condition. Here the survyor uses his own discretion depending upon how he feels the condition of the property is – based on his experience of other properties in that area.
Valuations… statistics…
The valuation software uses sophisticated statistical analysis methods to value a property. It works in similar way many pollsters forecast the number of seats a political party is likely to win at the next elections. House price valuationdone by using stastical methods is more certain than political forecasting as it is based on known data – i.e. prices that have already been paid by buyers in that area, crime and other statistics.
All statistical methods are rules driven. For example, an extension used as a bedroom can be assigned weight x (or value percentage) and living room as weight y etc. Obviously these rules can be changed at any time by software designers.
One of the most popular statistical method used for property valuation is hedonic regression.
DIY valuations – for free
If you want to find out how much your property is worth for FREE using such sophisticated valuation tool but without having to ask a professional chartered surveyor then click on the following link. Fill in details of your property,and it will give you a range.
You an even download a free report. This report make suggestions how you can enhance the value of your property and by how much, e.g. by adding a new bedroom or bathroom etc.
Is it cool or what?
Click here to go to the property price advice website for your own valuation
Many professionals use Home Track – a subscription based service. Home track uses similar modelling software – and costs around £30 per month. However, the Property Price Advice is a great, free alternative to Home Track.
Here is the link again
http://www.propertypriceadvice.co.uk
Whatever your experience with this service, share it with us by leaving a comment below.
-o-
It is a very interesting tool. Although in some cases the valuation prices is seriously wrong. I checked 5 properties and one of them was wrong. The rest was right. It is not bad at all.
It is a good, informative article.
Finally understood that a surveyor does not have to be a ‘super human’ to do dozens of vals each day (not now but when market was at peak and every on and their grandmother were buying properties). There are many such valuation tools available and this tool is pretty useful too – especially now as I know how it works.
I used it for my residence and was relieved that price is what I thought it would be. Thanks for sharing this tool with the rest of us.
John
Hi
thanks for this.
It was very wrong for my main residence but I’m going to try it now on my more humble BTLs and will be interested in the results.
Thanks for the link
Torsten
You can also have a look at this Valuations Toolbar:
http://tinyurl.com/l4e7uw
Three attempts and it would insit on showing leasehold not freehold
However just the lowest value would be excellent