What is a RICS Valuation and Do I Need One?
When it comes to property transactions, having a fair and realistic valuation is often the starting point to success. In fact, for some types of property transaction, having a valuation report undertaken actually forms an essential stage in the process.
Many people might mistake a RICS Valuation for an estate agent’s valuation, which is otherwise known as a ‘market appraisal’. Where an estate agent’s valuation could be biased to tempt a buyer to use their services, valuations that are produced by RICS Registered Valuers reflect a fair and accurate market value that a willing buyer and purchaser would both accept.
This blog takes a closer look at the process of RICS Valuations and the circumstances in which you might need one.
How are RICS Valuations completed?
RICS Registered Valuation Surveyors must follow a thorough process when undertaking a valuation. They must assess several aspects of the property, including the way it was built, its size, location and general condition. Using this information, the next step is to evaluate the property and compare it to similar properties that have recently sold nearby. The resulting report that is produced must provide detailed evidence to show how they have come up with their estimate, all the while following the RICS valuation guidelines, known as the ‘Red Book’.
When might I need a RICS Valuation?
The majority of RICS valuations undertaken on residential properties are for mortgage purposes and are instructed by the bank or building society. These reports are not normally shown to the buyer, but are for the benefit of the lender so they can be sure their loan is viable.
Some home buyers may choose to have a RICS valuation as part of their HomeBuyer Report or Building Survey Report. This provides the true market value of the property and can be useful in the negotiation process.
In the past few years, there has been growing demand for RICS Valuations from buyers taking advantage of the government’s Help to Buy scheme. As well as needing a valuation as part of the purchase, any transaction involving the property down the line, including selling it or repaying the loan in part or in full, will also require the services of an independent RICS valuation surveyor.
People purchasing a property via Right to Buy, or for tax or legal purposes, will also need a valuation report completed by a RICS Registered Valuer.
Due to the fact that Chartered Surveyors and RICS Registered Valuers are accountable for their valuations and must follow the guidelines and codes of ethics as laid out by the RICS, the majority of banks and lenders will only accept a valuation report from a RICS Registered Valuer.
Is a RICS Valuation the same as a Survey?
Whilst a RICS Valuation is an important – sometimes essential – step in a property transaction, it doesn’t look at every aspect of the property.
For example, any defects that do not affect the property’s value will not be covered, and any defects that are identified will not be investigated in detail.
As such, when buying a home, it is essential to instruct the services of a Chartered Surveyor to complete a HomeBuyer Report or Building Survey Report. These reports provide detailed information on the property and its condition, so buyers can be fully informed before they proceed.
Matthew Parkinson Surveyors offer RICS Valuation Reports in Lancaster and across Lancashire, East Yorkshire and Cumbria. Our RICS Registered Valuers and Chartered Surveyors undertake reports for all purposes, including Help to Buy purchases and staircasing.
For more information on any of our Valuation Reports or property surveys, please get in touch.
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