How do housebuilders like Wimpeys give a market value to their new properties?
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They use the comparable method of valuation.If for instance its a three bed semi in a rural location they look for similar properties in similar locations.They then add or subtract value depending on the subject properties location and desirability.The valuation given at the start is just a guide valuation or what the surveyor expects the property to resonably achieved based on the infomation they have at the time. There are factors that can drive up the price when it goes on the market such as demand being more than supply and bidding wars can sometime lead to daft prices being paid.You just hope the person selling you the house hasnt used the daft price as thier comparable.Good luck
Build cost multiplied by 3 or so it seems to me.
Look at houses in the surrounding area, build to a standard and add a bit (or a lot!)
Because they hire a Surveyor to give average prices for new build properties in that area. Wallah ! There is your price.
nothing to do with build costs. they are priced to what people are prepared to pay. simple as that.
Work on the comparable method first, add on a premium of say 5% because its new, to give a Gross Development Value (retail value of all completed units)
Deduct all construction costs, professional fees, off-site costs etc.
Deduct cost of land.
Calculate profit as % of GDV. If profit too low put up the price!
Simple. But i'm sure they do exhaustive market analysis as well.
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