House prices seemed to become a national obsession and a regular topic of conversation at parties and in pubs. The recent recession has curbed our interest somewhat and when they are talked about it is often the amount people have “lost” that dominates the conversation.
Much of this talk of property value however is based on myths and half-truths.
Firstly the regular reports in the national press regarding the increase and decrease in values. These cannot be accurate and are often misleading with average prices taken from all sales over a given period. They will include sales across the country which encompasses mining areas and towns with massive unemployment as well as London, with its own international market and so called hot-spots, where the prices bear no relation to anywhere else. Furthermore the sales include that of property in need of considerable work, homes unsuitable for a mortgage and those where the sellers do not have time to find the buyer that falls in love with the property and need to sell to the first offer.
With something as diverse as properties the talk of average value/price is nonsense.
Secondly all the authors of these findings are involved in the market and so cannot demonstrate any objectivity. Lenders need to lend, agents need to sell and to gain instructions and newspapers need to maximise their circulation.
Thirdly, people only hear what they want to hear. Everyone knows it’s raining but no-one accepts they too will get wet. The owner of a property that they have been calling home for some time will feel that their property is the best; after all it is the way they have made it, their choice of décor and the garden arranged and planted just as they like it. Every improvement made will add to their opinion of value. Sadly it’s not the seller’s opinion that counts, the buyer needs to agree.
When selling a property it is important to keep in mind why you are selling. Is it to move home or to dispose of a property that is surplus to requirements? Is it to raise some money or to decrease debt? Whatever the main reason this should inform all your decisions. Often the eventual price is less critical than the speed of the sale and sometimes the time it takes is far less important than getting every last penny out of the transaction.
Beware though, a property is not worth more if it’s on the market for a longer time, in fact the reverse can be true with buyers turning down a property just because it has been available for ages and, “if it hasn’t sold there must be something wrong with it”.
So what is property value? It is what a buyer will pay at the time and not what is asked. To be ahead in the property market a seller must firstly listen to and take advice, be prepared to react to the response they get from buyers and, if need be, review and drop their price to attract a sale.