There are many reasons you might need a valuation on a property. As covered in our series of blogs on ‘Alternative reasons for a valuation’, these can be legal occurrences, such as when a property is part of the assets in a divorce settlement, for commercial reasons such as a property portfolio review for a landlord, or to assist with Inheritance Tax planning. There may be a much more straightforward reason you want a property valued – perhaps you are considering selling it!
Depending on why you need a property valuing, you might decide that rather than pay a Chartered Surveyor, you will just ask an estate agent to carry out a valuation as if they were going to put it on the market.
There are several issues here.
First and foremost, the asking price that a property is marketed at is sometimes vastly different from the eventual price the property sells for and therefore doesn’t actually represent a true ‘valuation’. The sale price of a property can depend on many factors, such as demand for a particular type of property, the availability of other similar properties at that moment in time and the condition of the property, amongst others. It may even come down to emotion – if a buyer really falls in love with a place, they may be willing to pay well over the odds. Alternatively, a property that is placed on the market for more than it’s worth may fail to attract potential buyers, leaving the vendor unable to release the funds tied up in the property.
You also need to consider the motivation behind an estate agent’s valuation (or ‘market appraisal’, as it’s sometimes called). Estate agents will usually compete with one another to win the business of a vendor. One of the only ways an estate agent can differentiate themselves when pitching for a client’s business (aside from their fees for their services) is to demonstrate the properties in the area they have recently sold and put forward a strong suggestion for an asking price. From a vendor’s perspective, if three estate agents come back with three ideas of an initial asking price for a property, they’re unlikely to go with the one that has the lowest valuation.
Another consideration is that some (although not all) estate agents calculate their fees based on a percentage of the sale price of the property, meaning they are even more motivated to try and agree a sale at the top end of a property’s value.
If you use a Chartered Valuation Surveyor or a RICS Registered Valuer to conduct a valuation report on a property, you are guaranteed a number of things. RICS Registered Valuers and Chartered Surveyors are governed by the Royal Institution of Chartered Surveyors (RICS), meaning they must follow strict professional and ethical guidelines.
When conducting a valuation report, the surveyor will consider the exterior and interior condition of the property. Although a valuation is not a survey and an in-depth inspection will not be carried out, any issues will be flagged in the report, often recommending that a more in-depth investigation be carried out.
A Chartered Surveyor will also look at what similar properties locally have achieved on the open market in recent months to make a reasonable comparison with the one they are valuing.
Ultimately, property owners seeking a valuation or buyers that obtain a valuation as part of the mortgage process can rest assured that as an independent professional, a Chartered Surveyor or RICS Registered Valuer will not be motivated by the prospect of a possible sale commission and will not therefore be biased in any way.
It is also worth noting that if you require a valuation for formal proceedings of any kind, such as court proceedings, it may be necessary to instruct a Valuation Report from a Chartered firm that is regulated by RICS, such as ourselves.
If you wish to instruct the services of one of our Chartered Surveyors or RICS Registered Valuers to conduct a property valuation (residential, commercial or agricultural), please contact us here.
