Back to Blogs
For many years a verbal assessment was a guess at best when estimating what your property is worth, or what you should ask when going to market. This is usually fraught with imperfections such as the seller’s sentiment, the seller’s ego, or simply a wrong uninformed shot in the dark by the agent. It is also not uncommon for unscrupulous estate agents to inflate the property price in order to get the seller’s permission to market the property. If any of these factors had an influence on establishing the market value of your property, expect to sit with it for some time before it sells and it may also involve some price drops along the way. In sharp contrast to this, you may have your property undervalued by yourself or an unenlightened agent, resulting in it selling quickly but at a serious financial loss to you, the vendor.
So what is the best route to take? Get a professional market-related valuation done of your property’s worth. In doing so there are only plusses involved and this is beneficial for possible buyers as well. We explain:
What is a property valuation
A property valuation is a fair and impartial estimate of the price the market is more than likely willing to pay for your home. It does not matter whether it is an apartment, a villa or palazzo. Because this document is based on fact, it will be hard for any buyer or seller to ignore when a reasonable offer comes along. As we know, buying or selling a property always involves some to-ing and fro-ing and this is part of healthy negotiations and a sound business practice. A proper valuation will never be just one piece of paper but often be accompanied by a CMA (current market analysis) and more to justify arriving at the price for your property.
Factors that determines the value of property
A property valuation is a fair and impartial estimate of the price the market is more than likely willing to pay for your home. It does not matter whether it is an apartment, a villa or palazzo. Because this document is based on fact, it will be hard for any buyer or seller to ignore when a reasonable offer comes along. As we know, buying or selling a property always involves some to-ing and fro-ing and this is part of healthy negotiations and a sound business practice. A proper valuation will never be just one piece of paper but often be accompanied by a CMA (current market analysis) and more to justify arriving at the price for your property.
An indicative valuation
Here a seller will usually look at the selling prices of similar properties that sold recently in the area and this will be a good indication of your property’s worth, but this can at times be inaccurate especially if the market in your area or in general has been stagnant for some time. It is advisable to rather contact a reputable agent specialising in your area for a more accurate estimate.
A professional valuation
This is a thorough and meticulous valuation carried out by a professional and qualified individual such as an architect, who will charge a fee for their services. They will take all the following into consideration before arriving at a valuation amount:
- Location – is it remote or central, is it close to all amenities, major roads, and public transport routes; are there schools, hospitals or shopping centres nearby and more. Having all this in close proximity to your home will make it more attractive to potential buyers.
- Square meterage of the home, plot size, the number of bedrooms
- Generally the bigger the property, the higher the price but this is not always the case as some areas are more prestigious than others.
- Classification and zoning
- Is the area your property’s located in/on zoned for mixed-use, residential, commercial, or is it in a UDA? Some properties may even have different zoning for different levels of the property.
- Age and building condition
- On average older properties are less expensive than new ones, but this varies widely. Developers may offer discounts on new developments, an old property may have heritage status, or be the former/current home of a very famous person.
- Maintaining a property over the years will also play a role in achieving better sales results, no matter what the age.
Additional factors that will influence a property’s price
Selling with your heart and not with your head
All sellers have an attachment to the property they are selling after having been there some years. This often results in them forcing the agent to inflate the price because they think their home is better than that of the neighbour’s, although it is identical in age, size, and upkeep. Being unrealistically priced, the property is unlikely to sell and will remain on the market for months, if not years, and any wise agent will never take on a property that is exorbitantly priced for what it is, as it is in no-one’s best interest.
Selling to friends or family
Selling a home to a relative or friends usually means a more beneficial asking price and thus does not reflect the true value of a property. This can have a negative impact on surrounding property prices as intrinsically those who sell after you will look at what your property eventually achieved as the selling price. Remember, this does have a historic influence, especially where a number of sequential sales in the same area were preferential to family and friends and thus undervalued.
Pressurised selling
Selling a home under duress due to external pressures such as financial or medical issues will most likely result in a seller accepting a lower price.
Homes with reputation
Selling a home in Malta that has a questionable past is not required by law to be revealed to potential buyers. On the other hand, properties that have a stigma attached to them such as a ghost or having being the scene of a violent crime will precede anything else that is known about the property and buyers will get to know about it. Properties in this category are difficult to sell and command lower prices. The same goes for homes that are adjacent to graveyards and most of the folklore surrounding properties like these are perpetuated verbally with no real facts to support the rumours.
The Payoff of a Getting a Valuation Done
Getting a professional valuation done by an expert will only supply you with the concrete, cold hard facts related to arriving at your property’s worth.
The best thing to do in the world of property buying and selling is to deal with reality, as only then you will make the best decisions. For instance, if a potential buyer lowballs you with an unrealistically low offer, the valuation done by an expert is your best defense of why they should up their offer or go elsewhere. If you as a seller had your head in the clouds about your home’s real worth, getting a valuation done is the best remedy for any unrealistic expectations you may have had.
Valuations level the playing field and save everyone precious time: from the seller to the agent and especially for any buyer, as they will know that you as a seller have done your homework. Since you have your feet firmly on the ground, you are also unlikely to waiver too far from the original, realistic asking price. In fact, we bet that with a professional valuation you will more than likely sell sooner and get a very good offer on your home!
