How we value a property – Tortoise Property Blog

Hello everyone, I’m Sam. I’m new to Tortoise Property and Estate Agency. I have a BA Honours Degree in Marketing from Sheffield Hallam University and wanted to find somewhere that I can put that to use, which is why I’ve ended up here!

This blog will be a weekly series of me recounting my experiences, explaining why great marketing is so powerful when selling your home and the exciting plans I have for the future of marketing in Estate Agency. I believe this will be beneficial to me as I write down everything I do and hopefully will be to you also, as I do my best to explain Tortoise Property, convey our difference and answer any estate agency questions that anyone may have.

Welcome to Episode 7!

We’ve moved past our Phased Marketing Model and the individual sections of it now. If you missed it and want to check them out then click here!

Today we’re taking a look at how we value a property.

Now for those of you who are recent customers (or just big Tortoise fans), you’ve probably seen our valuation model. For those of you who haven’t, it’s pictured for you below.

Setting the Marketing Price for Your Property

Setting the right marketing price for a property is crucial to ensure a successful sale. Here’s a comprehensive guide on how to do it effectively, using insights from Tortoise Property’s valuation approach.

Understanding the Valuation Model

1. Online Valuation Tools:

Using online valuation tools can provide a good starting point. These tools analyse local property prices to give a range: minimum, average, and maximum prices. This range helps in understanding where your property stands in the market. It’s similar to the tools lenders use for desktop valuations, providing a solid foundation for further analysis.

2. Postcode Analysis:

The Dataloft tool is invaluable for analysing average price increases or decreases within a postcode. By comparing these trends with your property’s purchase price, you can estimate its current market value. This historical data helps in predicting how much your property is likely to be worth today.

3. Price Comparable Reports:

OnTheMarket and other property portals provide comprehensive price comparable reports, which are crucial in property valuation. These reports list similar properties in your area that are on the market or have recently sold. By comparing your property with these, you can determine a competitive and realistic price. The reports can also include graphs and data showing current demand at specific price ranges, ensuring your pricing strategy aligns with market demand.

Where data is sparse – Using Average Square Footage Price

Estate agents often also use the average square footage price for an area as a baseline for valuation where data for recently sold homes is not available or where there is not enough data locally to gain a good understanding of local pricing. Here’s how to incorporate it:

Determine Average Price per Square Foot: Collect data on recently sold properties in your area, focusing on their sale prices and square footage. Calculate the average price per square foot.
Adjust for Property Specifics: Consider factors like property condition, location, and unique features. Adjust the baseline price per square foot accordingly to reflect these nuances.
Cross-Reference with Comparable Sales: Use the price comparable report to ensure the adjusted price aligns with market trends.

The Importance of Accurate Pricing

Pricing a property correctly the first time is essential. If a property is initially overpriced, it may languish on the market, leading to inevitable price reductions. Once a price is reduced, potential buyers may perceive it as a bargain, prompting lower offers. Conversely, pricing slightly below the perceived value can generate more interest and potentially lead to competitive bidding, achieving the desired price.

An underpriced property will float to the surface and find its true value, through buyer demand, whereas an overpriced home will sink to the bottom and not normally achieve a sale at its true value.

Check and Balance System

A robust check and balance system ensures that the proposed price is accurate and justifiable. This system involves:

Market Analysis: Regularly reviewing market conditions and adjusting the price based on current trends.
Peer Comparison: Continuously comparing the property with similar listings in the area.
Feedback Loop: Gathering feedback from viewings to gauge if the price aligns with buyer expectations.

Market Dynamics

Understanding market dynamics is key. There are three main market types:

Buyer’s Market: Supply exceeds demand, leading to lower prices.
Seller’s Market: Demand exceeds supply, pushing prices up.
Balanced Market: Supply and demand are equal, leading to stable prices.

Each market type will determine if adjustments in a home’s marketing price and ultimately its selling price will be required or justified.

Your target

Setting the right marketing price is a blend of art and science. By leveraging online valuation tools, postcode analysis, price comparable reports, and average square footage prices, you can arrive at a realistic and competitive price. It’s crucial to continuously monitor the market, adjust the price as needed, and ensure that the pricing strategy is backed by solid data and market insights.

Remember, you and your estate agent are setting a marketing price based on how the market and its buyers have behaved recently. Ultimately, the market and its buyers will determine the true value of your home once it enters the market for sale.

To Conclude…

And there you have it. That’s my brief rundown of how we price a property here at Tortoise. If you have any questions or would like to learn more then feel free to get in touch with either me on my LinkedIn below or the office on 01733 59 20 20.

Thanks for taking the time to read this blog!

Looking for some next steps? These links could be useful:

If you have any questions or topics you would like to see me discuss in the future, then please do get in touch. I’m more than happy to connect with marketers, whether you work in my industry or not, as well as industry experts who I myself could learn from. You can connect with me on LinkedIn here.