Singing Pig

I am a newbie BMV investor and wondered whether anyone knew of courses run to help (beginners) make valuations of residential property. I suspect estate agents are sent on them at the beginning of their training but dont want to become an estate agent just to do a course ! 

Alternatively I wondered if there was a good property book on this subject or one which covers it in good detail. 

As far as I am aware their are no courses available. It's really down to experience. After all, a 3 bed semi in Hackney is going to cost more than the same property in Liverpool!

When a person starts in estate agency, they learn how to value a property by experience. They are obviously shown how to take measurements etc, but the value is always subjective. Just watch an episode of Property Ladder. Sarah Beeny invites 3 local agents in to value the property and quite often they can be thousands different.

If you want to learn about property prices in your area, spend some time on Rightmove, looking at a variety of properties and how they are priced.

there is nothing more valuable than going into houses which are on the market and seeing what you get for your money and comparing both houses and estate agents one with another

What you are looking for is not an exact science unfortunatley. Youve correctly realised that this part of bmv dealing is crucial to get right!

If there was the equivalent of a Glass' guide fro second house houses - as there is for second hand cars..then it would be quite simple. Fact is - there isnt..so you have to become an expert in 'working out' what the realistic achievable (selling price) of a particular property would be.

Its all about common sense, and ultimately you get out of your research what you put in. Personally, I have a two pronged approach.

Firstly, I simply look at historical prices locally, and what prices are being asked today in that area. I then speak to agents who are selling htose houses (posing as a potential buyer) and also apply instinctly my own perceptions of price based on my expereinces over time.

 None of this is conclusive..but its a good start. i always, after my thorough research, have a pretty good idea of the property's achievable value. However,,,for me thats not enough..I need to underpin it.

Secondly, I use my trusted estate agent. I have developed a relationship where the agent is willing to visit the house (this comes at a point where I am looking likely to get a deal) I simply want their honest conservative assessment of what they house would achieve today..in its current state (no ifs or buts 'if the kitchen was changed it would be worth x')...just straightforward opinion.

This is one reason why I strongly advise that people work as tight an area (gepographically) as they can get away with with. By working a very large area, you probably expose yourself to the strong chance of you simply making a mistake which can cost you dearly later on..especially if your deal is a quick flip BTS opportunity

Thank you I am really grateful for the advice Pete, Clottie and Rialto. Your right about the course, I thought it might help but I now think 'Rialto's estate agent' would be a better option anyway on the more difficult assessments or properties on which an offer will be made. 

Basically I need to refuse the temptation to make any offer before finishing as much research as possible ( including finding out what Hackney will be charging for works on ex-council blocks ) on asking and sale prices. I think I can do some research within 2 days with a full time job.

I could use the 'recruited' estate agent all the time  but best to keep for the property on which I could make an offer. I think i need to slow down the offer stage down completely, suggest to vendor that we really to do need to get an accurate assessment of the property and will bring in an expert to do this. 

Anyway it cant be good negotiation to make offers too soon, better to make it look like a smooth process of careful assessment which it is of course. 

I have made error on not chosing a tight area, been trying to cover all of north and east london which is a bit big for a beginner !  

  

 

 

 

 

yes youre right about the large area..more so in London..where prices vary so much for similar properties just 100 yards away at times!

You need an expert on board...if you screw up your research in London - with its high prices...you can catch not just a cold..but fatal flu!

Many people dont realise that the cost of bad research not only can cost you money if you pay too much...but can lose you deals that you may have landed if youd been more clued up on the reality.

simple example..................

You see house that you decide has OMV of 100k. Your offer will be max 80k. Seller says 'no thanks'...but would sell to you at 88k say. You walk away - as there is no value in it (according to your research conclusions)

However...what if the reality of this case is that house really has OMV of 110k and your research was inadequte and sloppy..resulting in yr 100k valuation?

If this house is worth 110k OMV - verified by EA -then you can do the deal safely at the 88k the vendor needs!

It cuts both ways against you if you arent careful.

Take control of a tight manageable ara and link up with an agent. This will ensure you become an expert in that area...very soon your own common sense and instinct will help you to tune into OMV easily and quickly

 

Many thanks Rialto. Your advice is spot on as always, even though I suspect several of us who also read your excellent manual are tempted to take short cuts. 

Clearly new investors like myself need to spend time building links with estate agents who will be willing to provide some valuations. It is a bit difficult at first because we cant offer them many leads in return for their service. One or two estate agent valuers agreed to do it for me after i spoke to the branch manager. I wonder how other newbies, following your strategy,  have fared in recruiting their estate agents.    

As far as I know, the vast majority have - indeed, no one has ever told me they havent been succesful. I do know of some who decided from the start that it wasnt for them..and thats fair enough..its simply my best advice (particularly when your new and potentially vulnerable) to getting a helping hand - and forge a professional local contact too.

If the approach/proposal by the investor is made correctly it should at worst appeal to the EAs sense of curiosity and greed. The proposal of 'leads in exchange for help' is a simple and logical one and, if presented properly, it is hard for even the most cynical EA to admit that it should work well in practice.

The main angle of the approach by the investor should be that of a casual air.

 Dont let the EA think for one moment that you are desperate for their services...far from it...you arent!...there are lots of EAs in most towns. Simply let them know you are approaching them first (giving them first option). Be cool about it...let them know you will be speaking to others if it isnt for them.

I've done this on behalf of quite a few sp members and have never failed to get an EA on board for them.

Like most things - its how you present the content.