When you’re buying a property it’s vital to pin down a fair price, and for that, you need a valuation. So which is best, a lender’s valuation or one carried out by independent property valuers?
What is a lender’s valuation?
A lender’s valuation is a survey that provides the mortgage lender with confirmation of what the property is worth. The valuation process includes checking the price of similar properties already sold in the same area.
The idea of a lender valuation is it reveals to the lender whether there are any serious problems with the property, serious enough to affect its value. If your lender finds the property is in a high-risk area, for example on a flood plain, or in bad condition, they can refuse you a mortgage.
The mortgage lender instructs a surveyor of their choice and the report the surveyor delivers is primarily designed to benefit the lender. It’s usually shorter than a full valuation report and you might not even be able to see it. While they should let you know if their investigations found anything serious, not all lenders provide a copy of their valuation to the potential buyer.
Can you value your own property?
In some cases you could try to carry out your own valuation, using the wealth of information available online. If all you need is a rough ballpark number, it could be a decent solution. There are plenty of clever online house value calculators that can pin down the value of a property, and some of them are pretty good. They take into account the number of bedrooms, your garden, extras like parking spaces, conversions and additions, along with the building’s age and condition, what it’s built of, the building style and more. But an online valuation tool can’t deal with the many unique local issues that can force the value of a property up or down.
Some websites will attempt to calculate the difference in the value of a property over time based on market forces and the economy. All you do is put in your postcode and the price the property last sold for. It can be handy, but it also has faults – it doesn’t take recent renovations and improvements into account. Only independent property valuers can do that, and they can only do it in person.
Why use an independent property valuer?
An independent property valuation is conducted by a neutral party, someone with no special financial or other interest in the property to be valued. It makes sense that a valuation expert with no interest in the property is likely to provide a less biased assessment. An independent valuer will tell you exactly how much a building is worth in the current property market, without being swayed by a lender’s requirements.
You might simply want to know how much your home is worth to help you make a big decision – to either extend or move house, for example. Some costly home renovations don’t add value to your home, others do, and you need to know the truth either way.
An independent valuation is also a good move when you want to know how your property’s value stacks up against similar properties locally. If they are regularly selling for more than yours is apparently worth, it’s a reasonable indication that you may need to refurbish or improve your place before putting it on the market.
Legal issues when a property valuation goes wrong
Ask any property lawyer and they’ll probably tell you they see occasional claims for negligent over-valuations, where a person’s mortgage valuation leaves them, years later, in negative equity because the original price based on the valuation report was seriously over-inflated. It’s interesting to note that the courts have confirmed a valuer can make a 10% ‘margin of error’ before being legally held responsible for an inaccurate valuation. Unless your valuation was more than ten per cent out, you probably won’t be able to make a legal claim. And that provides yet another reason why it’s wise to get it right first time with the help of proper, qualified, professional independent property valuers!
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If you’d like a reliable independent valuation of your property that’s professional, quick and accurate, we’ll handle it for you. You can trust us to get it right first time, every time.