Market appraisals are general estimates of a property's market value. Usually conducted by estate agents, they give a feel for average selling prices in the area, as opposed to the best-selling price.
A valuation however is conducted by an RICS surveyor who has the professional expertise to provide an accurate evidence-based market valuation based on the property's condition and local knowledge.
Something worth noting before we dive in, is that a Valuation is not a building survey that gives you a detailed description of the structural condition of the property. Nor are they a "gut feel" estimation that an estate agent gives on similar properties they have sold.
As we previously mentioned, they're carried out by an RICS surveyor. All property valuations are conducted using well-crafted processes that have been developed using the standards and principles set out by The Royal Institute of Chartered Surveyors.
For a sample of the guidelines, please check out this article by RICS Key Standards Which Out Professionals Work To In The Valuation Sector.
So, what do they do?
The RICS surveyor will visit the property and check factors such as:
Equipped with this knowledge, they will then conduct desk research of similar properties in a comparable condition and in the same area. It's through this rigorous process that they establish an accurate valuation.
Let's now look at Valuations in a little more detail.
An RICS Valuation is also known as a "Red Book Valuation" or "RICS Valuation Report" and is a written market valuation of your property.
As we have seen, they're completed by registered RICS surveyors complying with RICS principles. They establish the market value of the property, determining how much a lender or buyer will offer, and are essential for factors such as:
The guidelines for carrying out this sort of valuation are in an RICS publication called "The Red Book."
Only registered members of the Royal Institute of Chartered Surveyors (RICS) can conduct this type of valuation.
RICS defines it as:
"The Red Book is issued by RICS as part of our commitment to promote and support high standards in valuation delivery worldwide. The publication details mandatory practises for RICS members undertaking valuation services. It also offers a useful reference resource for valuation users and other stakeholders."
One last thing, when you hire an RICS surveyor you have the peace of mind that the advice on your project is protected by professional indemnity insurance.
Usually conducted by estate agents, as opposed to trained RICS surveyors, they give you:
The motivation of the valuer is also different. As they deal with volume, selling a property quickly to earn faster commissions means the price is sometimes undervalued to get the sale.
Something worth noting is that anybody can say they are a property valuer, but it's only an RICS qualified and registered surveyor that can accurately give a valuation based upon the code of practice and ethical standards laid out by RICS.
Usually, a free service is offered by estate agents, who visit the property and give you an estimated property valuation based on previous sales they have done in the area.
A good market appraisal will also recommend what you need to do to achieve the price. The level of expertise needed to do a Market Appraisal is however limited.
Whatever property project you are involved in, it's best practice to have both.
Remember though, an RICS surveyor is an unbiased, independent and skilled professional surveyor.
Whereas an estate agent conducting an appraisal is usually not a surveyor and certainly not unbiased. Turning over properties quickly is how they earn their money.
With this in mind, let's compare the two.
|Property Valuation||Market Appraisal|
|Gives an accurate property price||Provides a price for the quickest sale|
|Identifies structural issues that would affect the price||Can only spot cosmetic details and not structural issues|
|Access to sophisticated property databases for incredibly accurate desk research||Simple access to their own very limited portfolio database|
|The client is covered by professional indemnity insurance giving 100% peace of mind||The client is not covered by insurance and has no right to redress if the valuation is wrong|
The two types of valuation are often different, as only an RICS valuation will give you an accurate unbiased price. This is why you need a valuation as well as an appraisal.
If you want the assurance that an RICS Valuation surveyor provides then we have you covered. At Camsure Home Surveys, we have local RICS surveyors across most of the UK who have experience in your local area.
All of Camsure's chartered surveyors are RICS qualified and skilled in Valuation Surveys. You can find a surveyor near you easily by visiting:
Areas We Cover.
RICS - www.rics.org