If you’re hoping to sell your home but aren’t sure how much it’s worth then you’re not alone, as it’s a dilemma many homeowners face.
Even if you’re not planning on selling your property soon you may still be interested because it could help you get a better deal next time your remortgage.
A house is only worth what someone will pay for it
It’s so easy to think that your home is worth more than it actually is, perhaps in part, down to the old saying ‘an Englishman’s home is his castle.’ You might see similar properties advertised online and in your local paper and wrongly think that their asking price is what they’re worth. Instead, you should look at what properties actually sold for, as often this is thousands of pounds less.
In most cases asking prices are inflated so that the seller can negotiate with the buyer and still be happy with the price. For instance, a house may have had an asking price of £255,000 but it might be sold for £249,000.
Changing your expectations
Even if you price your house to sell, you may still struggle depending on what the market is like in your particular area. If there aren’t many buyers or there is an influx of similar properties you may have problems.
If there is a similar property to yours for sale for the same price and it has a more up-to-date interior then buyers are more likely to choose it over yours. This is why many people decided to give their houses mini-makeovers before they put their homes on the market. Refreshing the paint work and finishing the little DIY jobs you’ve started and not finished can be a really good idea.
The most important rooms to get right are usually kitchens and bathrooms – so if yours are looking tired why not consider replacing the cupboard doors in the kitchen and updating the bathroom suite?
Obviously any money you spend you want to get back when you do sell so it’s important to set a budget and keep a close eye on what you’re spending. If you don’t have enough disposable income or savings to do the updating you want to do then you could look at finance options such as a credit card or a loan. Think carefully before borrowing though – you need to make sure that you can afford the repayments and bear in mind that the money you spend on doing up your house isn’t guaranteed to help it sell and you might not end up achieving a higher selling price.
Even if you’re not wanting to sell right now, you may still benefit from finding out how much your home is worth – especially if you have owned your property for several years or have renovated or extended your property. If your property’s value has gone up since you bought it and you’ve been paying down your mortgage then your then the equity you have in the property will have increased. If this is the case you may be able to remortgage to a better deal – many lenders offer better rates to those with more equity in their property – in other words a lower Loan to Value.
What’s Loan to Value?
Loan to value is a financial term that mortgage lenders use which expresses how much your mortgage is compared to the overall value of your property. The lower your LTV the cheaper the deal you’ll probably be able to get.
For instance, if you originally bought a property that was worth £250,000 and had a mortgage of £200,000 your LTV would have been 80%. If you have paid off £45,000 of your mortgage in the meantime and your house is now worth £300,000 then your LTV will now be 52%. Because your LTV has improved you should be able get a better deal when it’s time to remortgage.
Join the conversation
We hope this article has helped you understand how important it is to find out what your home is worth and how to go about finding out. If you have any advice for people trying to sell their homes please get in touch via Facebook or Twitter.
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