There are three main types of property valuation, all of which require an independent body to carry out the valuation. The property is compared with others of a similar size and age, and any damages or structural faults are taken into account are taken into account, including any potential repairs, and a price of the property’s worth is decided on. The three types are:
- A basic valuation is required by lenders before they will lend out money for a mortgage, so that they know they are not lending more money than a property is actually worth, so that they know repossessing it should pay off the mortgage, should the case need it. This valuation is fairly superficial and not very detailed. Often the mortgage lenders organise the basic valuation as it is for their benefit, but unfortunately the house buyer is the one who has to pay the fee. The price is often between £100 and £300 and is the cheapest of the three types.
- This type of survey is important for the buyers of a house. Whereas the basic valuation goes to the mortgage lender, the homebuyer’s report is a detailed visual inspection designed for the homebuyer and is made simple to understand. It highlights to the buyer any issues with the property so they are prepared and forewarned of any potential costs that might be required, such as repairs. It then gives the buyer a chance to re-negotiate the price, or ask for the current owner to deal with the repairs before the sale. Again, this will cost the buyer, even more than the Basic valuation, but could also save them a lot of money should anything be wrong with the property. The valuation might cost in the hundreds, but could also pick up on repairs that might cost into the thousands later on.
Buildings Report (Which was formally the Full Structural Report)
- This is the most in-depth and costly survey, and is aimed at buildings that are over 75 years old, made out of unusual materials, like a wooden house, or ones that are planned to have large amounts of work carried out on them. These surveys will take much longer to do, and longer to be written up, as the valuer will check everything they possibly can and pick out every little fault they find. The report will then be given to the home buyer, so that they can re-negotiate the price or request for changes to be made to the property before the sale occurs.