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Home Report Valuations - How To Interpret?

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I've been wondering how to interpret home report valuations (and for that matter, surveyor valuations in general).

Seems to me there are at least two big variables in any valuation - (1) the desirability of the property and (2) the state of the market.

No doubt surveyors have some kind of guidance and formulas for (1) (does anyone know what they are?).

And what is their approach for (2)? For example, do they take into account the normal seasonal variations in a market like Edinburgh, in which case one should look very carefully at the date of the valuation. How do they read the current market if there are no recent comparators? How recent do comparators have to be?

Finally, seems to me it would be useful to separate these two issues - is it possible to get a surveyor to estimate an historical value for a property thereby much reducing the second variable. For example, could I ask a surveyor to estimate the value of a property in, say, June 2006? I think this would be a much more valuable piece of information because it would leave me to read the current market situation, and give me a more direct measure of the surveyors view of the "desirability" of the property.

So - can anyone explain how surveyors arrive at valuations? Is there a better way of thinking about this?

cheers

F

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I've been wondering how to interpret home report valuations (and for that matter, surveyor valuations in general).

Seems to me there are at least two big variables in any valuation - (1) the desirability of the property and (2) the state of the market.

No doubt surveyors have some kind of guidance and formulas for (1) (does anyone know what they are?).

And what is their approach for (2)? For example, do they take into account the normal seasonal variations in a market like Edinburgh, in which case one should look very carefully at the date of the valuation. How do they read the current market if there are no recent comparators? How recent do comparators have to be?

Finally, seems to me it would be useful to separate these two issues - is it possible to get a surveyor to estimate an historical value for a property thereby much reducing the second variable. For example, could I ask a surveyor to estimate the value of a property in, say, June 2006? I think this would be a much more valuable piece of information because it would leave me to read the current market situation, and give me a more direct measure of the surveyors view of the "desirability" of the property.

So - can anyone explain how surveyors arrive at valuations? Is there a better way of thinking about this?

cheers

F

EA adverts seem to make a big deal of £x thousand under the home report value. This suggests to me that they are pretty meaningless and go out of date quickly. When interested in a property, historical data is the only thing that really bothers me with regards to considering a "fair" price.

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I've been wondering how to interpret home report valuations (and for that matter, surveyor valuations in general).

Seems to me there are at least two big variables in any valuation - (1) the desirability of the property and (2) the state of the market.

No doubt surveyors have some kind of guidance and formulas for (1) (does anyone know what they are?).

And what is their approach for (2)? For example, do they take into account the normal seasonal variations in a market like Edinburgh, in which case one should look very carefully at the date of the valuation. How do they read the current market if there are no recent comparators? How recent do comparators have to be?

Finally, seems to me it would be useful to separate these two issues - is it possible to get a surveyor to estimate an historical value for a property thereby much reducing the second variable. For example, could I ask a surveyor to estimate the value of a property in, say, June 2006? I think this would be a much more valuable piece of information because it would leave me to read the current market situation, and give me a more direct measure of the surveyors view of the "desirability" of the property.

So - can anyone explain how surveyors arrive at valuations? Is there a better way of thinking about this?

cheers

F

Why would you trust an estimate of the value at some point in the past any more than you trust the current valuaton? If you trust the person making the guess than simply go with the current one.

Ultimately a valuation is somebody else's opinion of what they think its worth. (Based on their experience of having made valautions for many different properties over many years.) But they are not the ones putting up the money, you are. And if the valuation and guess of the state of the market is wrong its you who loses money. In the end its your responsibility to decide.

Works in both directions. In the past you might have been willing to pay a lot more than a valaution. Today you might only be willing to pay a lot less.

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Why would you trust an estimate of the value at some point in the past any more than you trust the current valuaton?

Because an estimate from the past would go some way to eliminating one of the big variables - the surveyor's reading of the current market conditions.

But it's not so much that I'd 'trust' it completely - I just think there might be more information in it.

...If you trust the person making the guess than simply go with the current one.

Ultimately a valuation is somebody else's opinion of what they think its worth. (Based on their experience of having made valautions for many different properties over many years.) But they are not the ones putting up the money, you are. And if the valuation and guess of the state of the market is wrong its you who loses money. In the end its your responsibility to decide.

Well, I'm assuming that a valuation is more than just an opinion. Or at least it is an opinion formed by following certain rules and guidelines which attempt to bring some objectivity.

Of course it's my decision at the end of the day and it's my money - that's understood. But I don't see it as black and white as just trusting a surveyor or not. There is some information in their valuations and I'd like to get the best understanding of that as part of my decision making.

Would still like to know if anyone has some insight into surveyor valuation guidelines?

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  • 334 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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