It’s common to talk about property valuations and surveys in the same sentence when buying and selling houses. If you are hoping to purchase a property, or you’re waiting for a sale to go through, it’s critical to understand the differences. In this article, we’ll delve deeper into what surveys and RICS valuations are to help you decide which one you need.
A property valuation is designed to provide you with an accurate estimate of the value of a house or flat. There are different types of valuations, including estate agent valuations and valuations carried out by surveyors under guidelines issued by the RICS (Royal Institution of Chartered Surveyors). The condition of a property will be considered when valuing a home, but there are several contributing factors that influence valuations. Key factors include:
There may be a difference between valuations you receive for a property if you are selling your home. Often, estate agent valuations are higher than surveyor valuations.
It is important to understand that an RICS valuation is not the same as a survey or a mortgage valuation carried out by a lender. If you are eager to proceed with a purchase and you have applied for a mortgage, a surveyor will visit the property on behalf of the lender to make sure that the valuation matches the value of the buyer’s offer.
A survey is a written assessment, which focuses on the condition of a property. It is hugely beneficial to have a survey done on a property before you proceed with the transaction. Surveys are designed to provide information about the structure of the building and flag up any issues, which may need addressing either immediately or in the future. As a prospective buyer, surveys can help to ensure that you know what you are buying and what kinds of repair jobs and costs you may encounter if you choose to go ahead.
There are different types of RICS surveys available offering a range of options to suit different properties and budgets. The most basic survey, a Level 1 survey, offers an overview of the property based on a visual inspection. All survey findings are classified using a traffic light system, with red marks indicating potentially serious problems or issues that need urgent attention.
Level 2 surveys provide more detailed information and assessment of the importance and severity of potential issues. Level 3 surveys, the most comprehensive reports, cover all parts of the building, observe services in action and make general recommendations about remedial work required for the red and amber observations noted in the report. It is possible to add a valuation to a Level 2 survey.
Property valuations may be requested by buyers or sellers under the following circumstances:
Surveys are recommended for prospective buyers. Arranging a survey enables buyers to learn more about the condition of the property before they agree on a fee or sign on the dotted line. Surveys can reveal issues that are not visible to the naked eye during house viewings and they can give you an accurate idea of what you can expect to take on in terms of home repairs if you choose to go ahead.
It is particularly important to invest in a survey if you are buying an older property or taking on a project, which requires extensive work. A survey can help you save money in the long term and prevent you from uncovering potentially costly surprises further down the line. If you are renovating or restoring an old house, a surveyor’s recommendations could also help you to determine which jobs are a priority.
Property valuations and surveys are not the same. Valuations provide an estimate of the value of the property, while surveys offer information about the condition of a house or flat. The most detailed surveys are recommended for buyers who are keen to purchase an old house or take on a fixer-upper.
Author: Chris Bloor is a chartered surveyor and RICS Registered Valuer as well as being the founder and Managing Director of CJ Bloor Property Consultants – a property consultancy based in the Northwest of England. Prior to establishing CJ Bloor in 2019, Chris worked as a senior professional consultant in another firm of chartered surveyors based in Newton-le-Willows.