Property valuations provide an insight into the value of houses and apartments. Whether you are buying or selling, you may benefit from arranging a property valuation. There are two main options when valuing a property: estate agent valuations and RICS valuation. Estate agents provide an estimate based on their opinions and sale prices in the local area, while RICS valuations are based on a framework and established good practice guidelines set out by the Royal Institution of Chartered Surveyors. If you want the most accurate estimate, it’s wise to arrange an RICS valuation. Estate agent valuations are often inflated to try and achieve higher sale prices and encourage sellers to choose one agency over another.
When to arrange a property valuation
There are various scenarios in which it is beneficial to schedule an RICS valuation. These include:
Selling your home
One of the primary reasons homeowners seek property valuations is when they’re considering selling their homes. By getting a recent valuation, sellers can set a competitive and realistic asking price, ensuring they don’t undersell or overprice their property.
If you are selling your home, it’s important to get an accurate estimate of its worth before you decide upon an asking price. An RICS valuation will provide you with a figure and the report will explain how the surveyor came to their decision. A surveyor’s valuation will help you to set a realistic price for your home, which could increase its saleability and prevent you from experiencing disappointment if you set the bar too high and you struggle to attract attention.
Paying off a Help to Buy loan
If you purchased your property through the Help to Buy scheme, you will need a property valuation when you decide to pay the equity loan back. In most cases (outside of London), buyers put down a 5% deposit and borrow another 20% through the Help to Buy loan scheme. If you wish to sell, for example, you will need to pay the loan back. The new valuation will determine how much the property is worth and therefore how much you owe.
Buying a larger share in a Shared Ownership property (staircasing)
Many people now buy properties through Shared Ownership schemes, which are designed to make housing more affordable and accessible. In some cases, buyers wish to secure a larger share of their home, which is known as staircasing. If you have plans to increase your share of the property, you will need an RICS valuation to determine how much you need to pay for each share. Shares are available in increments of 10%.
Buying property
Many sellers will put their homes on the market with an asking price, which is guided by an estate agent valuation. If you are buying a house or a flat, it is beneficial to make sure that you are not paying too much before you submit an offer or exchange contracts. An RISC valuation provides an accurate, up to date valuation. You may find that asking prices exceed market value and that estate agent valuations are higher than RISC valuations.
Probate
If you are named as the executor of a will and the individual has assets in the form of property and real estate, you will need to arrange a property valuation as part of the probate process. The value of the property will be incorporated into the total value of the estate. The figure will influence the amount of inheritance tax due.
Understanding return on investment
If you’ve made significant improvements or renovations to your property, a valuation can indicate how much value those changes have added. This can be particularly useful if you’re considering further renovations and want to understand potential returns on investment.
Insurance Purposes
To ensure that your home is insured for its full replacement value, it’s wise to have it valued every few years, especially after making significant upgrades or renovations. This will ensure you’re neither under-insured nor overpaying for coverage you don’t need.
Divorce
When you file for a divorce, your assets will be analysed as part of the agreement. If you own a property with your spouse, it is beneficial to have it valued professionally.
Curiosity and Market Insight
Even if you’re not immediately considering a sale or refinance, knowing your property’s current value can give you insight into the local property market. It provides a benchmark for potential future decisions or for understanding how local developments may be impacting property values.
How do I arrange a valuation?
If you wish to arrange a home valuation, contact local surveyors who are registered with the Royal Institution of Chartered Surveyors. You can discuss your requirements and find out more about fees and availability. If you have friends or colleagues who have recently bought or sold a property or been through divorce proceedings, it’s an excellent idea to ask for recommendations.
Property valuations give buyers and sellers an estimate of the value of houses and flats. If you are buying or selling, you have purchased a property through the Help to Buy or Shared Ownership scheme, or you are going through probate or divorce proceedings, it is beneficial to arrange a professional, RICS valuation. Surveyor valuations are required in some instances, but even if they are not required legally, it is a good idea to pay for an RICS valuation to get the most accurate price.
