The offer we place to buy your property will be based on the open market value of the property. We go to certain lengths to ensure that we obtain the correct valuation figure, a figure that is fair to you the vendor as well as fair to us.
It is not in our interests to have properties undervalued since this will make our offer to you uncompetitive and you will easily find another company able to make you a better offer. So please be assured our valuation procedure is thorough and detailed for your benefit as well as for ours.
The Royal Institution of Chartered Surveyors provides a standard definition of open market value and this is as follows: “The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arms-length transaction after proper marketing wherein the parties had acted knowledgably, prudently and without compulsion.”
In everyday terms this means that the value will be the price which we can expect to sell your property for when we come to market it ourselves. Once purchased we will immediately re-market your property so we need to be sure what price we can expect to achieve and this is what we mean by open market value.
The Royal Institution of Chartered Surveyors (RICS) also operate a panel of independent surveyors and we will appoint one of their members to assist with the valuation process. Members of RICS are independent surveyors, working for their own practice and bound by a RICS code of conduct, so their assessment of your property will be totally impartial. The surveyor appointed will be local to your area and so will be aware of local market conditions.
Further research will also be carried out into the property and the market locally. This will include assessing comparable properties for sale, comparing with sold properties and taking into account actual prices achieved within the area.
Estate Agents Valuations
Often we are given an estate agents valuation as the estimated open market value and we are happy to use this to make a guideline offer. Sometimes, when the full valuation is to hand there is a discrepancy between the valuation figures, usually the open market value is a little lower than the estate agents figure.
The reason why this can happen is not because a person is incorrect, rather it is because the purpose of the valuation is different. An estate agents figure will quite rightly factor in a degree of optimism about a property.
Also the estate agent needs to factor in any possible value growth whilst a property is being marketed. Lastly, because most buyers expect to haggle and offer less than asking price, it is important that the estate agents figure is higher than true value in the first place.
When trying to estimate the value of your property it is tempting to take a look at similar properties locally on the market and form an estimate based on estate agents asking prices. Please bear in mind that asking prices and actual sale prices can be two different things.