The comparable method of valuations seeks to arrive at a value by looking at the sold price of other properties with similar characteristics. By comparing these to the subject property and making adjustments to allow for any difference in attributes a valuation range is established.
How are comparable properties selected?
Valuers obtain comparable evidence from a variety of sources including Rightmove. They have access to a section of Rightmove that is not available to the general public. The Rightmove tool provides a comprehensive database including the sales history of the subject and comparable properties, sold prices from Her Majesty's Land Registry (HMLR), marketing details including floor plans and the location of the properties on a map.
What if there are no comparable properties?
The comparable properties selected are typically of a similar size, type, location and sold within the last six months. Where this is not available the Valuer will consider the next best available. The Valuer will take into consideration:
- The general tone of the market.
- The range of values – looking to establish the lowest and highest in the range.
- The various features of the property and what may or may not add value such as: Conservatory, Condition, Garage or Accommodation.
They will then compare these against each other and to the subject property to see where in the range the subject property sits to establish a valuation figure.