Why valuing houses will always be an art and not a science: Tim Waring
It is often said that the valuation of houses is an art not a science which can often leave homeowners in a confused state of mind when contemplating which estate agent to appoint for what to many is their most expensive asset.
There are some who simply take the view let's go with whoever quotes the highest price and give it a go. There are others who are more forensic because they know some of the issues that can arise when you get pricing wrong and there are many who fit between the two. Ultimately a property is only ever worth what somebody is prepared to pay, and this is where an agent's approach and knowledge is so critical.
The housing market is influenced by a unique blend of both tangible and intangible factors, all of which an agent has to factor into their thinking when arriving at what they consider to be an appropriate asking price.
Location and condition are perhaps obvious but understanding immediate neighbourhood trends, the prospect of future development as well as seasonal demand are all variables that mean valuation cannot be arrived at by a set formula.
Agents should and do have regard to comparable evidence, with many placing great emphasis on price per square foot/metre, but again there can be a raft of variables that need to be considered in addition.
The layout of the property may vary from a comparable of similar proportions, likewise garden size and orientation. It is widely acknowledged that most people prefer a south facing garden, and are willing to pay extra for the privilege, but to what degree?
It’s a judgement call that is often based on an agent’s experience and intuition. But what if a house with southern aspect is looking straight at a neighbouring house, whereas the alternative is a house that might have a north facing garden but next to open fields? The latter will probably to sell for more, and quicker, even if it is slightly smaller in terms of bedroom size or layout.
The same subjective thinking applies to location especially when the likes of schooling comes into play. A highly regarded school and catchment area can significantly influence the art of valuation, and at times totally distort the underlaying sales data that is still the bedrock of property valuation, or at least the starting point for an agent when undertaking the initial appraisal of possible sale instruction.
The fact the decoration may be terrible, or indeed the complete opposite, are largely irrelevant to the right buyer. And the same thinking applies to other price influencers such as long-distance views, access to amenities such as a surgery or shops, specific roads or a rail service.
As an agent, the secret is deciding what weighting to place on each factor. I would love to tell you it’s a scientific process affording a high degree of precision with a small tolerance for error. But that is not how it works because there are so many variables to consider, and that’s before adding in joys or otherwise of human nature. Valuing houses is undoubtedly an art and something that improves with both age and experience, as I can testify.
Tim Waring, prime residential, GSC Grays estate agents, gscgrays.co.uk