Property in London |
My client was understandably angry.
How could my valuation be 26% wrong?
It’s the Biggest Mistake London Property Buyers Make:
Using misleading statistics or comparable properties to value the property in London they want to buy.
Had I done the same? No, but a valuation surveyor had totally misled them.
I had helped my client buy a house and she wanted to sell another property in London to help fund it.
My client told me that she had had an official valuation by a bank carried out by a fully qualified valuation surveyor. The figure he gave was £2.3m. I hadn’t seen the flat at this stage so when I arrived I had certain expectations in mind.
When I arrived my heart sank. The flat was incredibly nice and had been refurbished and designed to a very high standard. The rooms were well proportioned, very light with big windows and high ceilings. It also had a roof terrace. It is a great flat.
Unfortunately, the valuation surveyor had clearly had a bad day. In my opinion the flat was worth about £1.7m at best. A week later, four agents’ visited and their valuations ranged from £1.695m to £1.85m.
As you can imagine my client found it hard to believe that the flat was worth, at best, 27.8% less than the survey valuation. Fortunately, she was in a position where the shortfall in expected funds was not an issue. Nevertheless it is incredibly irritating to have one’s expectations raised and calculations confounded by such a huge mis-valuation.
My client sent me the surveyor’s valuation report asking me to look at the comparable properties he had used to reach his figure. Unfortunately he had chosen a strange selection of properties which was rather like comparing apples to pears. They simply weren’t suitable hence the misleading valuation.
If a trained valuation surveyor can do this, you can imagine how many buyers make the same mistake. It is absolutely essential that you have a clear understanding of prices in your target market. The only way to do this is to view as many properties in London as possible and build up a library of similar properties that have sold recently (which ideally you should have seen).
RELYING ON THE INTERNET IS A HUGE MISTAKE AS ARE POUND PER SQUARE FOOT COMPARISONS
Yes, the internet may make life easy in many ways but here are a few reasons why relying on it is a bad idea:
- The agents don’t list every property available on the sites
- The photographs often make the property appear in better condition than it actually is
- Floorplans are often wrong
- You cannot judge the views
- You do not know what the neighbouring properties are like (google maps and earth are also no good)
- You cannot tell if it is affected by the underground
- It can be hard to judge the ceiling heights
- Properties can appear lighter than they actually are
- If an apartment block you cannot tell how the building is run or the standard of the communal areas
- You cannot tell if there is traffic or airplane noise
- Is the garden overlooked or is there a lack of privacy in general?
- Are there commercial properties nearby?
- Does the configuration of the rooms work well – this is often hard to judge even with a detailed floorplan
- Are there any unpleasant smells? E.g. is there a fish restaurant nearby or cooking smells emanating from neighbouring apartments?
There are plenty of other factors that I could include. If you do not know about these then pound per square foot calculations and comparisons can be extremely misleading. This is why buying on a pound per square foot basis is so dangerous. It is a blunt instrument and should be used as a guide only when buying property in London, rather than a rule.
So you can see how easy it is to miscalculate the value of a property and consequently pay far too much unnecessarily. Remember the estate agent works for the seller and is legally obliged to try to achieve the highest price possible. You, the buyer, are referred to as an applicant, so do not expect them to give you the best guidance on price.
Strategies & Tactics to Find The Best Property Your Money Can Buy & Negotiate The Lowest Price Possible
If you would like to discover the techniques I have been using for over 20 years to find the best properties in London for my clients and then negotiate prices they didn’t think possible, you can request a complimentary copy of my book, The Insider’s Guide To Acquiring £1m to £100m Property in London.
It is not mere theory – the book reveals the tested and proven strategies that I utilise. You can request your free copy by clicking here or you can call 02034578855 (+442034578855 from outside the UK).