How estate agents value your home

With buyers becoming increasingly price-sensitive, getting the right valuation for your home first-time round is not just important, it’s crucial.

The algorithms of property portals are such that buyers are immediately drawn to anything "new" — which is why it’s fundamental that your home’s initial asking price is an accurate one.

“When a property first hits the market, there’s a critical window of opportunity to attract buyers; it’s the moment when your property is fresh and new, sparking the most interest. This is when serious buyers are actively looking for new listings, and they’ll either book a viewing or pass, based on whether they feel the price reflects the value,” says property expert Sarah Walker.

If you undervalue your property, it’s likely that you’ll get competing offers from interested parties that will settle around its correct valuation anyway.

If you overvalue it, the opposite will happen, and, not only will the property take longer to go under offer, but, when it does, it will likely be for less than if you’d been realistic first-time round.

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“Overvaluing a property and testing the market aren’t just harmless strategies, they can cost you time, money, and the chance to sell your home at its true value,” says Walker. “It’s far better to price correctly from the start, ensuring you make the most of that crucial early window when interest is highest.”

To help you ascertain whether your property has been correctly valued or not, we asked the property experts and estate agents about how they come up with an asking price.

Is overvaluing property commonplace?

It doesn’t take a genius to work out that if one agent says your home is worth more than another, you’ll be tempted to go with the one with the higher valuation.

“Overvaluing by 15% to 20% is common for the worst offending agents, even though it’s explicitly banned by The Property Ombudsman,” says Charlie Lamdin, Founder of BestAgent.co.uk. “The problem for honest agents is that over-optimistic sellers never want to hear honest valuations, and so those honest agents lose business.”

While you might be dazzled by high figures initially, it’s important to remember that that’s just what they are — figures, not the actual value of your home.

“A property is only worth what the next buyer is willing to pay for it,” says Walker. “Sellers need to understand that the market determines the value, not personal feelings or comparisons that don't fully account for the specifics of their home.”

How do agents value your property?

A good estate agent should use a range of tools when coming up with a valuation. Researching and knowing an area is important but you can’t just go on what next door sold for because every property is different.

“Prior to any valuation, it’s crucial to understand the property’s local market and take into consideration a number of external factors, such as future infrastructural investments, transport connection, nearby amenities, schools and the valuation history of neighbouring properties or developments,” says Matt Thompson, head of sales at Chestertons.

“That being said, it’s equally important to be aware of the property’s individual history, its condition and potential in order to determine the appropriate value at the time.”

How relevant is square footage?

Square footage is often touted as a useful tool in valuations. In cities, such as London, different boroughs will have an average price per square foot which can be used as a benchmark when deciding on a valuation. Our experts suggest that this metric alone shouldn’t be relied upon.

Lamdin flags that even working out the exact square footage of a property in the first place might be an issue. “The problem is that, unless a house has been measured by a qualified surveyor, or using the RICS Code of Measuring Practice, the square footage measurements can be significantly inaccurate, and lead to liability for any agent selling on a price per square foot basis.”

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“While price per square foot can set a useful baseline, factors like the property’s layout, condition, and presentation are equally, if not more, important,” adds Walker. “For example, two properties of the same size may have very different values depending on how they’re laid out or maintained.”

Is décor important when it comes to valuations?

This is the age-old question that many sellers find themselves faced with: Should they pay out and repaint and refurbish or sell their property as it is?

“A structurally sound but decoratively tired home compared with a newly cosmetically refurbished home would typically be anywhere from 5% to 15% difference,” says Lamdin.

Walker agrees: “For something minor like a new lick of paint or updated flooring, you might see a small 5% difference. But if it’s a full renovation, especially kitchens or bathrooms, the gap can be much larger — maybe 15% to 20%.”

What tech do agents use in their valuations?

There seem to be a number of companies popping up that claim to have created tools to correctly value your property — but how useful and reliable are they?

“I use a mix of tools to ensure my valuations are data driven. Platforms like Dataloft, Rightmove (RMV.L) or Zoopla give me access to comprehensive sales data and local market analysis,” says Walker.

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“While years in the industry certainly give me an intuitive edge, I back up my valuation with hard data, market trends, and comparable properties. This combination of insight and data reassures sellers that they’re in capable hands.”

An art or a science?

In our tech-obsessed age, you’d think that we’d be able to get property valuations spot-on but that seems far from the case.

“You just can’t quantify certain things, including ‘the feeling’ when you walk through the door,” says Charlie Whelan, regional partner at Knight Frank.

“In my view valuing a property is more of an art than a science. An agent undoubtedly needs the science as a base to start from; you need to know the recent comparable sales and the price per square foot they achieved, however, I would say an experienced agent who really knows their market dynamics and the appetite from buyers will understand the subtle reasons why a particular property may outperform recent similar sales.”

Walker sums it up: “The science is in the data, the research, and the analysis of comparable sales. The art comes into play when considering factors like buyer psychology and motivation, market sentiment, and how a property feels.”

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