Both Estate Agents and Surveyors are in the business of valuing property – that much is obvious.
What is less obvious are the circumstances in which a Chartered Surveyor’s valuation would be more appropriate than an Estate Agent’s, especially when the former will costs several hundred pounds and the latter is generally free.
Which one is best depends on why you need a valuation in the first place.
Valuations can be undertaken to establish a tax liability, a grant of probate, to resolve a dispute in divorce proceedings, for accounting purposes or court proceedings, or to help with a mortgage valuation.
Other more bespoke scenarios include when an owner of a shared ownership property is looking to acquire further percentages of their flat (known as ‘
There are also occasions where a private transaction is taking place and each of the parties wishes to know the correct price to be paid for an asset.
Typically, Chartered Surveyor valuations are better when a valuation is required for legal purposes, whereas estate agent valuations are more appropriate for non-legal situations.
We’ve had both estate agent and Chartered Surveyor valuations done on properties we have sold and so this article is based on our experience.
Once the purpose of the valuation has been established, the next question is whether it would be appropriate or legal for an estate agent to value the property – and in the vast majority of instances, the answer will be an emphatic ‘no’.
Estate Agent’s Property Valuation: What It Is And What It Isn’t
The objective of an estate agent when valuing your property is to convince you to put it on the market with them and not one of their competitors.
While each agent will charm you with tales of why they are best placed to do this, the value they put on your property is not always what they expect it to achieve.
In a slow market, such as the one we are currently experiencing, the majority of agents will market your property at a price point they know is ambitious, with the expectation that they will need to drop down in order to achieve a sale.
Your ‘report’, which may include some analysis of local sales but often takes the form of a letter, will typically say something along the lines of: “We recommend marketing your property at £400,000 with an expectation to achieve £380,000”. So, what is the actual value? £400,000 or £380,000?
Essentially, their valuation is a target or ‘guide’ price for how much your home ‘might’ sell for. Ultimately, your property is worth whatever people will pay for it, and that cannot be known until it’s on the market.
When we have sold our properties, we’ve always found that the estate agent valuations are pretty close to what the house ends up selling for. Our first home sold for bang on the price the estate agents valued it at, our second one sold for slightly less than the estate agent’s valuation.
Ignoring the fact that you may have to effectively lie to the agent, telling them that you are considering selling your property when you may have no such intention, there is no obligation on them to provide an accurate valuation and no comeback if their figure turns out to be incorrect.
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How Does A Chartered Surveyor’s Valuation Differ ?
So what do you get for a Chartered Surveyor’s valuation report that can typically cost around upwards of £400?
A Chartered Surveyor undertaking valuations is regulated by the Royal Institute of Chartered Surveyors (RICS) and must follow the guidance set out in the Red Book.
Whilst there are some exceptions, any valuation that will be used by the parties to make a financial decision will need to comply with these regulations which, at their heart, require the surveyor to be appropriately qualified and act impartially and transparently in producing a valuation that is backed up by evidence and represents their unbiased opinion.
If the valuation is beyond their scope of expertise, then they should decline the instruction.
It is this type of report that will be accepted by Solicitors, Courts, Housing Associations or Local Authorities.
They will be required to undertake a conflict of interest check to further ensure impartiality. The client will be issued with a detailed set of terms and conditions that clearly outline the scope of the instruction so there is no ambiguity.
The inspection, whilst not a building survey, will thoroughly cover the property from top to bottom and take into account any defects that could affect the value.
Back at the office, the surveyor will have access to a vastly more detailed database and will be able to obtain confirmation of local under offer prices (estate agents can’t do this as they are competing against each other!).
Once you receive your report, you should be able to clearly see how the surveyor has arrived at their valuation and ask follow-up questions if needed.
In certain instances, such as Single Joint Expert or Expert Witness work, the surveyor can be asked to support his findings in Court, and if it all goes wrong and they are found to have been negligent, you have a process that allows you to seek appropriate compensation.
One thing we found when using chartered surveyor valuations was that time and time again, the valuation comes out bang on the price that has been agreed between the vendor and the buyer.
So, our advice would be to avoid telling the surveyor anything about what other people have valued it at, or agreed to pay. This way you can be sure they are giving you their true opinion.
