Value a property |
Are you worried about paying the wrong price for a property?
Unsurprisingly, most people are because no-one wants to make an expensive mistake or look stupid.
But how can you be sure that you are not being fooled by the estate agent or seller?
One of the most popular ways of assessing the value of a property is to use pound per square foot or square metre comparisons. If this is new to you, it basically means dividing the price of the property by the size to produce a price per sq.ft.
This style of valuation has become more popular in the last 15-20 years because of the new build developments marketing apartments in this fashion. Indeed, when I started Mercury over 20 years ago, many property details still didn’t include floorplans.
However, price per square foot comparisons can be quite dangerous, so you must be aware that they are quite a blunt instrument. They work well in new developments because most of the apartments tend to have a similar layout, so the difference in price tends to be due to what floor the property is located on and the corresponding view. Normally, the higher the floor, the more expensive the apartment on a price per sq.ft. basis.
Unfortunately, when buying a traditional property, it is far more complicated. For example, first floor apartments are likely to be far more expensive because in a traditional stucco-fronted property, the ceiling heights will be much better than on the third or fourth floor. There may also not be a lift in the building, thus making the latter less attractive.
So, when making price per square foot judgements, you must not just look at the bare figures. Other things that you must consider are:
- Ceiling heights
- Views
- Is there a lift?
- Condition of the property
- Style of the property
- Configuration
- Orientation
- Is there outside space?
- Number of bathrooms
- Length of lease
- Service charge
- Other facilities
- Location
This is far from an extensive list, but the key point is that you need to ensure that you are comparing like for like, because it is very easy for an estate agent to tell you that another property just around the corner has sold for £2,000 per sq.ft. and the one you are considering is £1700 per sq.ft., so you would be buying a bargain.
But as you can hopefully see, this may be a misleading comparator. The one that sold for £2000 may be a much better property or the person who bought it may have just massively overpaid! One comparator is simply not enough.
In short, you have to have a very clear understanding of prices in your target market. In some cases, prices can vary dramatically within a street itself, let alone an entire area like Belgravia or Knightsbridge.
It is very easy to make an incredibly expensive mistake, so please ensure that you are comparing apples with apples when making price per square foot comparisons. Otherwise, and excuse this dreadful pun, you will end up with a lemon…
So, if you would like to discover the more advanced techniques, I use to value properties and negotiate the lowest prices possible for my clients, you can request complimentary copies of my book, The Insider’s Guide To Acquiring Luxury Property in London.
The book reveals the tested and proven strategies and tactics, I have been using for over 20 years. So, if you would like to request a free copy, simply click here, email Dee, my executive assistant, at dee@mercuryhomesearch.com or call 02034578855 (+442034578855 from outside the UK).
