Understanding Property Valuations

When you see residential properties going under the hammer on TV, you might wonder if that's really how house auctions work. Why do people opt for this method of selling? Auctioning a house involves a more intricate process than meets the eye, yet it offers homeowners the potential for a quicker sale. Let's delve into what it entails to buy and sell at property auctions, the associated costs, benefits, drawbacks, online property auctions, and whether it's the right choice for you if you're considering selling your house this way. Understanding House Auctions A house auction is a meticulous process that unfolds over several months. An auction house compiles a marketing catalogue, typically published two to three weeks ahead of the auction date. Prospective buyers can arrange viewings of the auction properties and even conduct early-stage surveys to assess any structural issues. Open houses may be scheduled, and buyers can request a comprehensive legal pack for deeper insights into the legal particulars of the property. Each property is assigned a guide price in the catalogue, representing its estimated market value. Sellers can set a reserve price during the bidding process, which is the minimum price they are willing to accept and is often kept confidential from potential buyers. Is Auctioning Your House Feasible? Not every property is suitable for auction. However, if your property might be challenging to sell on the open market, an auction could be a viable solution. For instance, a rundown property might deter private buyers but attract investors or developers looking for opportunities. The Auction Process If you choose to auction your house, you'll need to select a reputable auction house to handle the sale. Opt for an auctioneer who is a member of the National Association of Valuers and Auctioneers (NAVA) for adherence to industry best practices. Auctions can be conducted in-person or online, with online auctions gaining popularity due to convenience. On auction day, potential buyers receive bidding numbers for identification during the process. Those unable to attend can submit proxy or online bids. The winning bidder typically pays a 10% deposit on the sale price on the day of the auction, with the remaining 90% due within 28 days. Costs Involved in Selling at Auction It's important to note that auction fees can be substantial. While costs are transparent, sellers should carefully consider whether auctioning their house is cost-effective. Here's what you may expect: Entry Fee: A flat fee paid to the auction house for listing your property. Auction Commission: Typically around 2.5% of the sale price plus VAT. Auction Legal Pack: Includes essential legal details prepared by your solicitor. Conveyancing Fees: Charges for conveyancing services upon sale completion. Legal Fees: Standard solicitor administration costs. Stamp Duty and Other Taxes: Consideration for buyers regarding purchase costs. Online House Auctions Online property auctions have surged in popularity, especially amidst social distancing measures. They can run continuously or as scheduled events. Post-Auction Scenarios If your property doesn’t sell at auction, it can still be sold post-auction through negotiation with interested buyers. Is Auctioning Right for You? Consider auctioning your house if: You need a quick sale. Your property requires significant renovation. There's commercial demand for your property. Your property has niche appeal. Benefits of Property Auctions Chain-free sale. Completion within 28 days. Ideal for properties needing renovation. Potential for competitive bidding. Drawbacks of Property Auctions Liability for fees even if the property doesn’t sell. Higher auctioneer commissions. Immediate move-out required upon sale. Advice for Selling at Auction Set a realistic reserve price. Ensure accurate property listings. Choose a reputable auction house experienced in selling your property type. Present your property in its best condition for viewings. Get an Initial Market Appraisal Today If you're considering selling your property and auctioning isn't the right fit, consider butters john bee for a seamless sale process. Our property professionals can assist you in achieving the right price at the right time. Contact us for a free initial market appraisal and discover our streamlined selling process today!

Obtaining an accurate valuation for a property you intend to purchase or remortgage is crucial for a seamless transaction. In this comprehensive guide, we delve into what mortgage valuations entail, how they operate, and their associated costs. What is a Mortgage Valuation and How Does it Work? A mortgage valuation is a survey conducted by a mortgage lender to ensure that the property's value aligns with the proposed purchase price. This survey is essential as it determines whether the lender will approve the mortgage funds required to complete the purchase. The same process applies when you are remortgaging a property you already own—a remortgage valuation verifies the property's current value against the submitted documentation. While mortgage valuations primarily serve lenders, they also provide buyers with insights into whether they are paying a fair price. It's important to note that a mortgage valuation differs from a house valuation, focusing solely on the property being purchased and serving the lender's interests. Mortgage valuation surveys can be conducted virtually (desktop valuation) or without a detailed inspection (drive-by valuation), depending on the lender's discretion. Understanding Remortgage Valuations A remortgage valuation mirrors a mortgage valuation but is conducted as part of the remortgaging process. This valuation establishes the property's current value when seeking additional borrowing against an existing property or switching to a new mortgage provider. Comparing Mortgage Valuations and Home Surveys Mortgage valuations should not be confused with property surveys. While surveys provide detailed insights for property buyers, mortgage valuations are specific to lenders, confirming that the property's value justifies the mortgage amount. Cost of Mortgage Valuations and Remortgage Valuations The cost of mortgage valuations is typically based on the property's price and ranges from £150 to £1,500. Some lenders offer this service for free. Remortgage valuations are often included in remortgage fees or paid by the lender, costing between £300 to £500, depending on the property's value. Preparing for a Mortgage Valuation or Remortgaging Valuation Preparation for a mortgage valuation is minimal. Typically, the survey assesses whether the property's purchase price aligns with its value. Ensure you have any relevant property paperwork handy, such as New Home Warranties or External Wall System forms. Drive-by and Desktop Valuations Some mortgage valuations are conducted without a physical inspection. Drive-by valuations involve visual assessments from a distance, while desktop valuations rely on available data and tools like the Automated Valuation Model (AVM) to estimate property values. Factors Influencing Mortgage Valuations Several factors can affect a property's valuation, including non-standard construction, structural defects, dampness, subsidence, fluctuations in the property market, property location, size, layout, and type. Dealing with Variances in Valuation If a mortgage valuation is lower than the agreed sale price, renegotiation with the seller or challenging the valuation with your lender are potential options. In such cases, lenders may adjust the loan amount or require a higher deposit to proceed with the purchase. Consulting with Just Mortgages For expert advice on mortgages and to explore your options, reach out to our mortgage partner, Just Mortgages. Understanding your borrowing capacity and initiating the mortgage process early can expedite your property purchase. For further inquiries or to discuss your mortgage requirements, contact Just Mortgages today.