What is a Property Valuation? FAQs Answered
There are many reasons you might need a property valuation, especially when selling or buying property. Here we explain what a property valuation is, who carries it out, why you might need one, how long a house valuation takes, how much it costs and how can you arrange a house valuation.
A property valuation has the purpose to set the value of your property and is something that both buyer and seller will need throughout the buying/selling process. There are different types of property valuations:
RICS Valuation Survey – this is a fundamental report that determines the house value, commonly referred to as a Valuation Inspection and Report. This is not a survey, however, being an RICS valuation report has a legal status compared to an estate agent valuation as it follows the guidelines and standards of RICS “Red Book”. An RICS valuation survey can be carried out by a Chartered Surveyor or an RICS Register Valuer.
Mortgage Valuation – this is usually carried out for the benefit of the lender and not the buyer. Usually isn’t disclosed to the buyer. As a buyer, you should instruct your own survey as the mortgage valuation has the only purpose to determine the real value of the property. Read more about mortgage valuation here.
Estate Agent Valuation – an estate agent’s valuation is usually based on their expert local knowledge of the property market to price your home. It’s worth mentioning that you will need to compare at least 3 estate agents’ valuations when comes to selling your home.
This article will cover:
- What is a Property Valuation?
- How Long does a House Valuation take?
- How Much is a House Valuation?
- What To Do if House Valuation is less than Offer?
- How Long after House Valuation to Completion?
- How Many House Valuations for Probate?
- How to Arrange a House Valuation?
- What Happens at a House Valuation?
- What To Do before a House Valuation?
The time it takes to value a property will vary from one property to another. Of course, valuing a four-bedroom detached property will take longer than valuing a one-bedroom apartment. It can take a bit longer to examine any special characteristics of your house.
Try to create a clear enough schedule so that the appraiser won’t feel rushed in order to ensure the valuation is accurate. Although, conventional an average house valuation takes 15 to 20 minutes; to be on the safe side, block an hour for the chartered surveyor to be in the property .
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As discussed earlier, when someone looks for a property valuation, depending on the purpose of the valuation, these can be classified as:
RICS valuation – starts from £250 (subject to house size, complexity, and location)
Mortgage valuation – which usually is instructed by your lender and starts from £150
Estate agent valuation – is free; however, you need to keep in mind that this type of valuation is just to give you an estimate of your house value before you are setting your selling price.
Sometimes a buyer’s mortgage surveyor will value the property for less than the accepted offer. The difference between these two figures is called down-valuation.
To everyone’s surprise, is a common occurrence. As per a BBC survey, almost 400,000 house sales were affected by down valuations in 2021. Unfortunately, down-valuations only arise when a house sale has already progressed, which is why they can be so problematic and often result in delays, lost money and failed sales.
If the property is undervalued, the buyer must find a new mortgage lender or pay the difference between the valuation price and the agreed sale price. If neither one nor the other approach is possible, the buyer has no choice but to withdraw from the sale process. Some lenders will also allow borrowers to appeal their appraisals.
As a seller of the property that has been down-valued, you have a couple of options to consider, such as: a.) find another buyer; b.) wait for the buyer to find a solution; c.) renegotiate the sale price; d.) if you can’t afford to delay the sale process, you can look for a quick house sale company (however, keep in mind that usually, these types of companies will offer you a below-market price anyway).
Honestly, the answer to this question depends on a lot of factors, from communication to property chains. Some things will be out of your control, but be sure to do your part to minimize the risk of delays, including being responsive and making sure your solicitor is proactive and responsive.
However, this is usually done 1-3 months after you receive a mortgage offer. As per the latest survey, the home buying process takes, on average, 250 days from start to completion.
As part of applying for probate, you need to find out if there’s any Inheritance Tax to pay. To find this out, you need to value the money, property and possessions (‘estate’) of the person who’s died.
Valuing an estate can take several months, but it can take longer if it’s a big or complicated estate (for example if it involves trusts or there’s tax to pay).
While you are not obliged to provide HMRC with any valuations straight away, there are time limits should the estate fall into the Inheritance Tax band:
- send Inheritance Tax forms within one year
- start paying tax by the end of the sixth month after the person died – you can make a payment before you finish valuing the estate
Although valuation surveys are subjective, most reputable professionals follow a similar process and produce similar appraisal numbers. A registered valuer or surveyor has the seal of an organization (usually RICS) so that their clients can be confident that their valuation opinion can be trusted.
Briefly, a formal valuation is an evidence-based appraisal that is made using relevant market data and internal and external inspections of the property, etc. Market appraisals, on the other hand, aim to give the owner an idea of what “guide price” is possible.
An independent home survey or valuation will provide you with a clear understanding of where you stand and what you’re signing up for. By undergoing the survey and/or valuation process, you’re essentially avoiding any unexpected additional costs, stress and hassle further down the line.
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If you’re not sure what to expect, it’s easier to imagine that the appraiser is acting like a potential buyer of the property. They will inspect each room, as well as all outdoor spaces, and note information such as condition, number of rooms and all fixtures and fittings included in the sale.
However, there are significant differences between how a potential buyer inspects a property and how a registered professional does it. For example, whilst most buyers would visually assess the size of the rooms, a valuation surveyor may physically measure them.
A surveyor will also take note of the age of the property, the quality of vehicular access and parking, and characteristics of the outdoor space such as topography, location and the size of the plot.
There are many factors out of your control that can affect your home’s valuation, such as your property’s size, location, and current market. But if you’re wondering how to get a higher home appraisal, think about how to best present your property.
Our quick tips are to clean up and clutter out, keep outside areas clean and tidy – which will improve the “curb appeal” of the property and prepare your paperwork for any alterations, or extensions. This helps the valuer to assess the history and condition of the property.