Real estate valuation is needed for several reasons. These include taxation, property insurance, investment research, financing, and sales listing. The main use of real estate valuation is to help people find the asking or purchase price of a property.

Proptino UK will overview the basics and methods of real estate valuation as they apply to sales. This article will present that.

Understanding House Valuation

A property's value is its future benefits, discounted to today. Real estate's benefits take time to feel. In contrast, many consumer products are used up quickly. 

To find a property's worth, one must evaluate: 

• Demand: the desire to own something, backed by the resources to satisfy it.
• Utility: the capacity to meet the requirements and wants of future owners
• Scarcity: the limited availability of rival attributes
• The ease with which ownership rights can be transferred is known as transferability.

Read also: Free instant online home valuation

How Value Differs from the cost

Price or cost does not always equate to value. Cost describes the real outlays that are made, such as labor or supplies. Contrarily, price refers to the sum of money paid for a product. For example, the house's worth can be less than the asking price if a major defect, like a bad foundation, is found.

Determination of market value

A valuation is an assessment call or approximation of a property's value as of a certain date. When making judgments on real estate transactions, businesses, government organizations, individuals, investors, and mortgage firms use appraisal reports. An assessment aims to find a property's market worth. It is the likely price it would fetch in a competitive, open market.

Property may not always sell for its true market worth at the asking price or market price. The property could sell for less than its market worth, for instance, if a seller is under pressure to sell due to the possibility of foreclosure or if a private sale is conducted.

Platforms For Online House Valuation

Zoopla

You can just glance at their listings and compare them with yours. It's a good way to roughly estimate your property's worth. As most of the listed properties have optimistic asking prices, do not expect to purchase one of the properties according to the listed price. Even still, Zoopla has a few other tools which can assist. They have a tool that provides an estimated price via Zoopla.

But it’s probably the most accurate estimate tool likely even when the number is just a ballpark figure. Some people describe them as a ‘guide price’ to a property’s worth. However, it uses a "secret formula" that analyzes many aspects of UK property sales and homes. After entering the parameters of the estimate, to get it you have to register.

Zoopla also links to similar tools. They let users check past sale prices of properties on any UK street. You can see from their 'listing history' that the property's price trend started in 1995. They also have cool, color-coded heat maps. They show current or street property values.

Rightmove

Rightmove is undeniably the largest UK home search site with over 800,000 homes for sale from across the UK. This makes Rightmove the best site to compare homes for sale. It will help you find a suitable home within your budget. Rightmove has a feature to search the actual prices of sold UK houses.

Rightmove obtains the newest Stock Market Data, or in this case, Sold House Price Data taken directly from the Land Registry and the Registers of Scotland. If available, they also display the old listings complete with photos, floor plans, and other features As for tools, this site also has the Price Comparison Report; this is a tool that provides the current and historical prices from Rightmove as well as Land Registry and Registers of Scotland.

It only shows several comparably located properties to enable you to contrast prices Feeling the pulse of the launching property market? Rightmove has a Market Trends tool. It shows the current and past market activity. It is enough to type a postcode and you just get to know what is going on in the market in that specific place.

Mouseprice

Mouseprice represents the "choice of the property expert," as they put it. Another basic valuation tool is available for free. This is by no means an accurate tool—it just needs your postcode and nothing more. They give an estimate of a very wide price range, such as £230,00 - £260,000. However, it's still a really basic tool that offers a reliable second view. They also provide a Heatmap Tool that shows new build counts, growth rates, and average values.

Land Registry

The Land Registry has house price data, house price calculator and heat maps. Through this search tool, one can view the most recent price of residential property based on all the registrations of residential property sales in England and Wales that have been submitted to us. This is the data on other sites such as Zoopla and Rightmove, the data available goes up to 1 January 1995 and comprises of property address, sold price, date of transfer, and the type of property. It is not nearly as sleek as the Zoopla/Rightmove ones, but it is simply the same information.

Regarding the Price Calculator, it is mentioned on the official website that ‘The Land Registry Price calculator depicts only the change in the general price, and this change is expressed according to the Land Registry House Price index. It does not factor in home improvements etc.

Here’s an example of a price calculator result: The Land Registry HPI for Cardiff, indicates that property valued at Forty Thousand British pounds in January 1995 would be worth One Hundred and Seven Thousand Five Hundred and One British pounds only in February 2016. This one is equal to £ 67,501 or 169 percent difference between the two rates. Thus, the changes amounting to 169 percent have been spread over 21s. And 1 year of growth is equal to a compound annual growth rate, or CAGR, of 4 percent. 8 percent.

Nationwide

Other lenders which include Nationwide also have their own House Price Calculator which is almost alike The Land Registry Price Calculator. This tool is very basic, it only needs the latest valuation/sale price of a property and they just add it by the % value change of that area from that year… is that clear? For instance, if you input £100,000 for the Valuation date (2015) with a Welsh property, it will incorporate the movement in the price of properties in Wales since then, +1. 69, and affords you a valuation in this day and age of £101,691. It is not the best tool. But, it could be worth a look. It gives a hint at how property prices are set.

Other Value Determinants

Yes, these tools are excellent for valuing properties, but they ignore other aspects that could affect a property's worth to the people who live there, such as:

• Flood Hazards
• Hazards of Subsidence
• Air contamination
• Environmental issues (such as radon gas levels and areas close to landfills)
• Rates of Local Crime
• Unpleasant Neighbors
• Internet Coverage Transportation Access
• Energy Charges Prices for Council Taxes Academic Performance

Hiring A Survyer for Valuation

In most circumstances, one may go to the property and get the valuation done by an independent chartered surveyor from RICS who will provide a clear independent report of the valuation. This service will cost you a fee. For paid services, each has a fee due to the provider.
There are several reasons to go ahead, including:

• Depending on the development and population density of your identified property or location is either in a rural area or a very uninhabited or even if it is a somewhat unknown area or Very difficult to identify an accurate fair market value of the identified property.
• You need a pro valuation of your home for equity release, probate, or business use.
• You can do many repairs and cosmetic works to the property. You want to know what value they can create.
• It was one of the conditions precedent before the planning application.
• You want to give a realistic, traditional view to those interested in the house.
• These surveys/valuations are typically priced starting from £300 but can range as high as £1,500 depending on the size and structural layout of the property and the final value.

Conclusion

In conclusion, there are many online platforms, real estate agents, and personal research for getting estimation of your house price. Proptino UK recommends using the right tool. It will give an accurate estimate of your property's value. These tools will give you an idea about the value of your property even if you do not want to sell it.