How to make sure your properties sell at a good price during general undervaluing?
By Qandor member Grazina Thompson, who is a buy-to-let investor and works at the Dapatchi Group. In this article, she talks about how to keep your properties at a good value even during a pandemic and Brexit.
With the COVID-19 pandemic still ongoing and Brexit uncertainty lingering around, how do we avoid properties being undervalued for those reasons when we come to sell completed properties? Here are a few tips on how we are currently achieving valuations at the right levels and preserving our profits on some of our finished projects.
If the completed units are sold on an open market, you are at the mercy of the panel of valuers that your buyer’s mortgage company will appoint to value them. However, there are a few things that can be done to improve your and your buyer’s chances of achieving the right level of valuations.
It is really important to put a lot of effort into the valuations of the first sales, where there are a number of units in the completed project. This is because the first valuations will set the precedent for the rest of the sales. If they come in at the right level, these can be provided to valuers of subsequent sales, which are likely to influence further valuations in a positive way.
So, the first thing we do is prepare a pack of information and as much comparable evidence as possible to assist the valuer. Of course, valuers are not obliged to look at your information, but most will be happy to do so. In particular, we speak to local agents and gather information on any similar sales that have exchanged or completed, but which would not otherwise be visible to the public and therefore valuers. These we pass on to the valuer through the sales agent.
If the valuation still comes in lower than expected, we would then have a conversation with the buyer to see if they could appeal it, or be prepared to go with another mortgage company and get a new valuation. Sometimes we shall even offer to contribute or pay in full for the new valuation. This way we manage to achieve enough valuations at prices that are not “cautiously” lowered by the valuers due to current market conditions.
If the valuation is to purchase a project, which you would want to get valued at the right level, start working both with your financing broker and therefore indirectly your lender, as well as the agent selling the property, which is to be valued. The agent will have a good grasp on which valuation companies are applying a more realistic as opposed to a cautious approach at any one time, being exposed to many sales and valuations in the area. Then speak to your financing broker / lender to see if they would accept to instruct that particular valuation company or valuer. You would be surprised how many times they would.
Agents are really instrumental in facilitating these conversations and the flow of information between all these various parties, so choosing the agent to sell your properties is also key.
Whilst it is not a given that you will always achieve the valuation at the desired level, by working as a team with all the parties, you have the best chance of getting close to your perfect outcome, even in uncertain times, like we currently have.
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