UKC

A quick question to help me out in a difficult situation.

If you were to value a property for sale ie an asking price and then were to give the same property a market value for valuation of an estate (probate, divorce etc). What would the difference between the two figures be as a %.

Feel free to pm your response if you don't want to go public.

Thanks in advance

In reply to 3leggeddog:

Im not surveyor but having been through this recently, it all seems a bit of a lottery. When you are faced with a divoced settlement or probate, the valuation seems to be geared more towards the quick sales price rather than the market value.

In reply to 3leggeddog:

I am a retired Chartered Surveyor

A suggested asking price is not a formal valuation, but a suggested figure with which to "test" the market.

For most valuations Market Value is used and as a general rule this will be the same regardless of the purpose of the valuation. A formal valuation should set out the basis on which the Valuation is made

The RICS define Market Value as:-


MARKET VALUE
"The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion."

In reply to Trangia:

Thanks for that, very helpful. In a given market there is always a typical variation between asking price and selling price. I suppose that is the question I am asking. Any ideas where I might find such data

In reply to 3leggeddog:

There is no hard and fast rule and so far as I know no published data. Asking prices can be notoriously optimistic and surveyors tend to take very little, if any, notice of them!

I found they were useful, though, in establishing what wasn't being achieved!

In reply to 3leggeddog:

Unlikely to be 'data' as such but you could:

Look at a few recent transactions (there are a number of websites, including the Land Registry directly) to see what recent property in the area has changed hands for then backtrack to the estate agents' particulars. Rightmove tends to still have the particulars on it long after the sale.

Go and talk to some local estate agents. If you explain the purpose of the enquiry they may help. Of course they may claim that they manage to achieve 'asking price' sales.

In reply to 3leggeddog:

The trouble with asking prices is that they often reflect too many uncertainties not least of which is unrealistic expectations and greed. Vendors tend to look at other asking prices in trying to establish theirs, and are less likely to take account of actual sale prices (such data can be more difficult to obtain and is often out of date in a changing market by the time it gets published). Surveyors will have better access to information on other sale prices (and the condition of those properties) than the general public.

Estate agents can be just as bad because they are in competition with other agents to get the property listed on their books, so there is temptation to give the vendor an optimistic figure which is what the vendor wants to hear. Once they have got themselves signed up with an agency contract, they will then start trying to chip away at the asking price to increase their chances of getting a sale. Immoral I know, but it happens a lot, because an agent who comes in with realistic advice at the outset generally won't get instructed because he/she is telling the vendor an unpalatable truth.

Then there is the market itself which can be rising (not at the moment), static (probably not at the moment) or falling (very likely at the moment) which necessitates constant monitoring. At the moment too high an asking price will not only not bring any response, it's likely to put purchasers from even viewing.

Extraordinary things happen in a falling market very much dictated by the personal circumstances of the vendor and purchaser, so it would be misleading to put any percentage on the drop from asking price to sale price. I've experienced cases where a purchaser intent on particular criteria which the property offers, offer the full asking price with the knowledge that it's too much so as to secure the property, and on the other hand I've seen an offer of £295,000 accepted on a house being marketed at £400,000 because the vendor has become desperate and HAS to sell.

Valuation in a falling market can be a nightmare.

In reply to 3leggeddog:

Trangia is spot on - the "value for marketing" is really a finger in the air, with no recourse. A formal valuation, as he set out, is effectively a legal document, with which you can be beaten around the head with and sued, hence the necessary high levels of due diligence.

Lookng at the Land Registry can be misleading - as sales are undertaken for a variety of reasons and without the context, the numbers are not that useful.

In reply to 3leggeddog:

When it comes to getting an estate valued, if you don't agree with the first valuation, you can always discuss your concerns with the surveyor and see if they will change it. Alternatively it might be worthwhile getting alternative valuations in isolation and see how they compare.