Estate agent London News

How are Properties Valued?

If you want to purchase a new property, are selling your home, or are considering remortgaging your current home, you will usually need to have the property valued, either for the purpose of determining the asking price as the seller or so that your mortgage lender as the buyer can determine that they are not lending you more than the property is worth. Understanding the different types of property valuations and how they work is important for this process.

What to Expect from Residential Property Valuations in London

Property valuation surveys tend to be requested by either sellers or mortgage lenders to determine the current value of a home. Depending on who is requesting the survey, the condition, type, and other factors about the home, this can be done in different ways.

Some surveyors conduct desk-based valuation surveys, which does not involve visiting the property in person, but rather simply includes researching similar properties in the area to find their selling price. To complete this type of survey, the surveyor may drive by the property to check the exterior and ensure that it is as expected. On the other hand, when a seller requests a property valuation survey or the mortgage lender needs more information, the surveyor may need to visit the property in person. This will usually be a short visit of between fifteen and thirty minutes, where the surveyor will check for any defects and problems that might impact the value of the home and confirm key details such as the size and number of bedrooms and bathrooms.

What are the Benefits of Getting a Residential Property Valuation in London?

Most of the time, property valuation surveys are carried out for the benefit of the seller or the mortgage lender. An accurate valuation survey before listing the house for sale can ensure that sellers are not pricing their home too low or pricing themselves out of the market by going too high, which would lead to them struggling to find a buyer for their home if similar properties in the area are listed for a lower price. However, the benefits of a property valuation survey can also stretch to buyers, who will be at an advantage when they have a clearer idea of how much the property is worth.

For example, if a seller is asking for a price that is more than the valuation states the property is worth, this can sometimes give the buyer more negotiating power with the seller, resulting in them paying less for the property if the buyer is eager to get a quick sale.

What Does a Residential Property Valuation Course in London Include?

A residential property valuation course will prepare surveyors for valuing a range of residential properties. No matter what the valuation is for, whether it’s for a house sale, mortgage lender valuation, or remortgaging a home, the surveyor will usually begin the valuation by paying a short visit to the property.

They will spend this visit looking around the property to get a better idea of how much it is worth based on a number of key factors such as the property size, the number of bedrooms, number of bathrooms, condition and age of the fitting and fixtures, and whether there are any defects present such as damp, mould, and structural issues.

Once the visit to the property is complete, the surveyor will then compare the property to other similar properties in the local area. They will usually look at three similar properties nearby that have sold in the past few months and note the selling price. The supply and demand for similar properties in the local market is also taken into account.

When valuing a property, some of the main factors that surveyors will look at include:

Basic Specifications

The layout, number of bedrooms, bathrooms, and other rooms, fixtures and fittings, garden space, parking space, and other basic property specs will often be some of the biggest contributors when it comes to valuing a property. Bigger properties tend to be worth more than smaller ones as a general rule, depending on the condition.

Appearance

The appearance of the property can also play a huge part in determining its value. While the valuation figure is unlikely to be significantly adjusted for small, superficial appearance-based factors that can easily be improved, a property that looks good, is well-maintained, and has good curb appeal may be valued higher compared to one that looks run-down and in need of attention.

Location

Finally, the surveyor will also consider the location of the property when determining how much it is worth. In general, properties that are close to many local amenities and services such as healthcare, schools, and transport links may be valued higher compared to those that are not.

Should You Get a Valuation or a Building Survey?

If you are in the process of buying a new home, it can be confusing to make sense of all the different survey options available and figure out which one will be the best option for you.

In general, valuation surveys that focus solely on determining the value of the home are used by sellers and mortgage lenders. As a buyer, it is important to bear in mind that the valuation survey is not going to provide you with any of the further information that you will need to know when buying a house such as whether or not there are any serious defects, how much it will cost you to repair them, and which ones need to be repaired first.

If you are buying a property, a building survey is a better choice since it will provide you with all of this information and most will usually include a valuation of the property. For many buyers, a homebuyer’s report is the best building survey option since it is usually adequate for the vast majority of properties of average age, size, and condition. It will include a valuation of the property along with an estimated figure for rebuilding the property from the ground up.

The Main Reasons to Get a Property Valued

A thorough property valuation survey can benefit buyers, sellers, and mortgage lenders. There are many reasons why property valuation surveys are carried out, including:

Setting the Asking Price

If you want to put your home on the market and list it for sale, it makes sense that you want to ensure you are asking for the best price. The right price will attract potential buyers to your home along with making sure that you’re getting as much as possible from the sale.

While you can get a valuation of your property from the estate agent that you use for the sale, instructing an RICS surveyor to carry out a valuation survey can also be very beneficial. This is because RICS surveyors are more likely to provide an accurate figure, which can help you avoid future down valuations, which occur when the buyer’s mortgage lender values your property as lower than the asking price.

Getting a Mortgage

For buyers who are applying for a mortgage to buy their new home, most mortgage lenders will require that a property valuation survey be carried out before they agree to accept the mortgage application and release the funds to the buyer so that they can complete the sale. In this case, mortgage lenders instruct a surveyor to complete a mortgage valuation survey, which can be carried out either by visiting the property or simply by researching the selling price of similar properties in the area that have sold recently.

Remortgaging

There are many reasons why some homeowners may want to consider remortgaging their property. Remortgaging can sometimes help you make sure that you are getting the best mortgage deal that is available, or it can provide you with additional funds that you need to renovate the property, make other improvements, and more. If you want to remortgage your current home, getting an RICS property valuation survey carried out before applying is a good idea since this will give you a clearer idea of how much to apply for and ensure that your application runs smoothly with a reduced risk of issues in the process.

Negotiation

Another way that a property valuation survey can benefit buyers is that it may give them more negotiation power with the seller. For example, if the asking price is higher than the property valuation, then buyers may be able to negotiate a lower asking price and ultimately pay less for their new home, especially if the seller is concerned about getting a quick sale or selling before property prices in their local area drop any further.

A property valuation is carried out for several reasons and will generally involve a surveyor checking the property for key details and features, looking for any defects and problems that might impact the value of the property, and researching the recent selling prices of similar properties in the local area to determine how much a property is worth.

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