An asking price is not the same thing as a professional valuation.
Estate agents, buyers, lenders and surveyors can all have different reasons for placing a figure on a property.
What is a RICS valuation?
A professional valuation is undertaken for a defined purpose and on an appropriate basis of value.
The surveyor considers relevant factors such as:
- The property itself.
- Location.
- Condition.
- Accommodation.
- Market evidence.
- Comparable properties.
- Tenure and relevant legal information available for the instruction.
- The purpose and basis of the valuation.
The precise approach depends on the valuation instruction.
Why might the figure differ from the asking price?
An asking price is a marketing decision.
It may reflect the seller’s expectations, previous purchase price, agent advice or a strategy intended to generate interest.
A valuation is an independent professional opinion formed using relevant evidence and methodology.
The two figures do not have to be the same.
What about a mortgage valuation?
A mortgage valuation is primarily undertaken for the lender’s purposes.
It is not necessarily a detailed assessment of the property’s physical condition or an independent valuation commissioned for every possible purpose.
This is why buyers should understand what their particular valuation or survey actually covers.
Can a valuation help during a dispute?
Potentially.
Purpose-specific valuations can be relevant to matters such as probate, taxation, matrimonial or other financial circumstances, depending on the instruction and applicable requirements.
The valuation basis and reporting requirements should be established from the outset.
Stokemont’s advice
If you need to establish what a property is worth for a specific purpose, do not rely solely on an asking price or an informal opinion.
A professionally prepared valuation provides an independent opinion based on the circumstances and purpose of the instruction.
