For even the most experienced of agents it is a very difficult market in which to value residential property.   Why? It is generally accepted that prices should be lower now than they were in 2007, however, the acute lack of stock is causing certain properties to sell at prices even in excess of these levels. That said other properties, particularly those at the lower end of the market are sticking as first time buyers continue to find it difficult to get into the market due to the high deposits required to get the better mortgage deals.

So how do you make sure your property is valued correctly?  You can start by doing some research and looking at what price similar properties are on the market for by searching the portals such as primelocation.com and rightmove.co.uk.  That said, there can be large discrepancies between a property’s asking price and its eventual selling price.  Mouseprice.co.uk which compiles land registry data is a free to use site which will list the price at which properties actually sell for but there are difficulties in analysing the data as it does not give essential information such as number of bedrooms, square footage, lease length, condition and the floor a property is on and whether or not it has a lift if it is a flat. Unless you know at least some of these before hand the information can be of limited use. In addition there is a time lag and the data is at least three month’s old by the time it becomes available from the land registry and the market can fluctuate significantly in this time.

The next step is to call in three good, reputable and established local agents who have a track record of selling houses in your road or apartments in your building. Don’t be surprised if you get wide discrepancies in the valuations. I have been in to valuations recently where there have been differences of hundred of thousands of pounds!  As tempting as it may be, the highest valuation is not necessarily the correct one and with the current shortage of stock some agents are once again getting carried away and purposely over valuing to win business and the talk the vendors down in price at a later date.  Don’t be afraid to grill your agent and make them justify their valuation. A good agent will be able to talk you through their thinking and give you examples of similar properties that they have sold. If they seem way of the mark and cannot do this convincingly they are probably wrong.

When you do eventually find a buyer make sure they have the means to buy the your flat or house and there are a list of steps you should ask your agent to check prior to getting started. This is even more important if you happen to have more than one buyer interested as you do not want to make what could be a very costly mistake and end up choosing the wrong one!

(1) Do they have a related sale? If yes, have they accepted an offer and how long is the chain? The longer the chain the more chance there is of something going wrong and the whole thing collapsing before exchange.

(2)  Can they actually afford to buy your property? If they are borrowing they should have an in principal mortgage offer. Your agent should be able to tell you who this is with and what percentage they are borrowing. The smaller the amount they are borrowing relative to the sale price the better. Banks are still cautious lenders and there is a chance that your property may be down valued by the bank’s surveyor, particularly if they are paying a full price. If they are only borrowing a small amount then this is less likely to have a major impact should it your property be down valued as the buyer may be able to borrow a bit more to make up any shortfall.

(3)  Beware of so called “cash buyers”. Many buyers are under the misapprehension that just because they do not have anything to sell they are in effect cash buyers and you may accept a cash offer only to find out that they are actually taking out a mortgage.  When selling repossessions on behalf of banks or building societies and in circumstances where we have multiple offers we now always insist on seeing actual proof of cash funds, even if it means buyers showing us bank statements. Some people can be funny about this but in my experience it usually means they do not have the funds.  If they really want the property and are serious they should not have a problem in proving they genuinely have cash funding in place.

(4) When you do exchange contracts make sure you insist on a full 10% deposit. There are still instances where buyers are unable to complete because they have not properly arranged their finances and you want to make sure you have a decent deposit in the unlikely event this happens.

If you agree a delayed completion there is a remote chance that the market may temporarily fall a little between exchange and completion and your buyer may get cold feet. However, with a full 10% deposit it will be far less likely that a buyer will walk away from a sale as they will already have paid an amount greater than any possible fall in value.