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Most estate agents agree that the most difficult part of their jobs is conducting the valuation of a property. This is not only because it is a hard task fraught with the chance to arrive at the wrong figure but also because delivering the news to homeowners can be extremely troublesome. Naturally people have their own idea of what their property is worth, when they are given a more realistic value disappointed often follows.

The majority of homeowners will find the results of a detailed property valuation will be somewhat of an awakener. It is at this stage that it is vital to remember that the value of your property is not defined buy how much it cost, how much you have invested into it or even what you think it is worth; ultimately it is only worth what it can reach on the open market. The valuation process takes into account all of the properties in the local area and especially those that are similar to the property in question, it is hoped that buy doing this it is possible to arrive at a figure that is accurate and realistic. Constant market fluctuations however make this process extremely difficult.

In the UK, as well as in many other countries worldwide the property markets seem to be struggling in a time that could be considered the cusp of a recession. This is a result of a more properties being on the market than there are buyers who are able to buy. It does not mean however that there are less buyers out there, it is due to the fact that mortgage brokers are tightening their purse strings and are not making high risk lends. The situation is a result of global restrictions on lending between banking institutions, understandably this affects the willingness of banks to grant mortgages. Once the credit crisis settles however it is likely that more buyers will once again enter the market.

This does not however mean that the valuation process is being conducted less. Instead of selling many homeowners are choosing to expand their property by building extensions. For most the construction of an extension will require a re-mortgage valuation by a surveyor in order to secure the funds. Valuations conducted by a qualified surveyor are the only ones accepted by mortgage brokers, this is due to the fact that they give an idea of exactly what the property is worth. In contrast valuations from estate agents purely give a figure that the property could reach on the open market.

Despite the difference in emphasis between the two forms of valuation they are remarkably similar in form. Both take into account current market conditions and the prices of properties in the area; naturally the estate agent’s value will place a large importance on the market. A surveyor’s valuation however will take more time to assess the condition of the property, factors such as outstanding maintenance work and any border disputes are involved in this. It is understandable that if a property requires a great deal of work to reach a sellable state, then the figures of any valuations will be markedly less.

With such a wealth of factors that have to be taken into account it is not surprising that figures for valuations vary so immensely. Understandably homeowners have their own idea of what a property is worth but in the majority these figures are misguided. It is hoped that this article has cleared up some of the issues surrounding the importance of the valuation as well as how market fluctuations affect prices.

Industry expert Thomas Pretty looks into ways in which the property valuation figures and property prices more generally.