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For anyone thinking of selling property in Llangefni, Bangor, Caernarfon or Holyhead, understanding how much your home will sell for is probably your biggest concern. Maybe you’re selling to move to bigger property or downsizing for your retirement. Perhaps you’re selling an inheritance or investment.
Whatever your motivation, the home’s current value is the key to your future plans. You’ll hear the terms ‘valuation’ and ‘market appraisal’ bandied about a lot. But while they may seem interchangeable, they’re not. We look at the crucial differences between a property appraisal and a formal valuation and explain when and why you might want to pay for the latter when selling a house.
There are several different types of property valuation and when you are selling a property, you will have a valuation provided by an estate agent, but if the buyer is taking out a mortgage, they will also require a mortgage lender valuation. These are the main types of property valuations:
When you put your property on the market, your estate agent will provide an appraisal based on a number of factors, such as the current local property market, property type, condition and size, and they may also adjust the asking price based on your priorities. For example, if you want a quick sale, they might recommend a slightly lower asking price but if you are looking for the maximum price, they might market it a little higher.
Estate agent valuations are often referred to as appraisals interchangeably. They are an informed estimate on the value of a home, based upon their market knowledge and other data.
Mortgage lenders require a property valuation to avoid the risk of lending more money than the property is worth. These valuations are completed by a RICS registered valuer, and some lenders include the fees within the mortgage arrangement with the buyer. This type of valuation is also used in calculating the loan-to-value, which will determine the interest rates available to the buyer.
A formal valuation is not, however, the same as a full structural survey or home buyers report. When the buyer instructs a home survey, they can request the surveyor to provide a formal valuation for an additional cost.
A ‘Red Book’ valuation is also carried out by RICS registered valuers but this type of valuation is generally used for calculating property value for probate, tax planning and inheritance tax calculations.
The chartered surveyor will base the valuation on their professional judgement, knowledge and research of the local market, alongside the guidance contained in the RICS ‘red book’ of best practice. They will also consider your home’s condition, the recent sale price of similar properties in the area and current market conditions.
Formal valuations are a requirement for mortgage lenders when they are assessing how much to lend for a mortgage. The valuation will help to ensure that the lender does not approve a mortgage based on a value higher than the property is actually worth. This can avoid issues such as going into negative equity.
There are also many other situations where you might require a formal valuation:
A full valuation is important for accurately calculating tax liabilities. A formal valuation may also be required if there is a dispute around the property that could end up in court.
A market or property appraisal is carried out by an estate agent, usually with a view to marketing and selling the property for you. Most agents are not surveyors and are giving an opinion of how much the property could be marketed at and then possibly sell for rather than an accurate opinion on market value that could stand up in court.
Although most agents are not chartered surveyors and it’s important for you to know that not all agents are even qualified – make sure when you ask for an agent’s opinion, that you select an agent who has both the experience and qualification – e.g. members of Property Mark NAEA or The Guild of Property Professionals.
The estate agent’s appraisal will be one part of their pitch to you as a seller, which would also include their suggested marketing strategy, recommended method of sale and any advice on making the property easier to sell – such as decluttering or sprucing up the home.
Estate agents will base the appraisal on their knowledge of the local market, recent sales data and current conditions as well as things about your home that their experience tells them will have buyer appeal – a great garden, close proximity to in-demand schools or good transport links. They will also base the appraisal on your aspirations as a seller – whether you’re looking to move quickly, if you’re part of a chain or whether you are happy to wait longer for the right offers.
Some agents often have an online tool on their website offering an instant valuation. For many sellers this is one of the first steps in taking the decision to sell and setting a budget for a new property. Instant valuations give you an idea of the price you could achieve.
They are not fool proof, and should be considered alongside other research such as recent sold prices of similar properties and properties for sale like yours. But they are a good starting point and an initial guide on price. Take a look at our instant valuation tool now.
If you’re thinking of selling, a property appraisal is the perfect next step after an online instant valuation. The appraisal will give you a more accurate idea of a realistic selling price in current conditions. It will come with advice from your estate agent about maximising your chances of a sale and making the most of your home.
It is also a chance for you to meet the agent and find out more about them and their record of selling homes like yours in the area. It’s advisable to be wary of any that value your home much more highly than you’d expect from your other appraisals and recent sold prices.
Market appraisals and full valuations are quite different so it is possible that a property’s worth could be assessed differently by a surveyor and a an estate agent.
The difference may not be an issue unless your buyer is applying for a mortgage and the property has been valued more conservatively by their surveyor. In this case their lender may need them to make up the shortfall.
If the buyer can’t afford this, you may need to renegotiate on price to ensure the sale goes through – or request they have a second valuation if you think it doesn’t reflect the current market. This is where a local professional agent will assist you and demonstrate their true value in helping to keep your sale alive.
The best approach to getting a property appraisal in North Wales is to use a local estate agent with extensive knowledge of the property market you are selling in. You can usually book a market appraisal from the agent’s website or contact them to arrange a suitable time – book a valuation with our agents here.
The key difference is that a formal property valuation is a legally recognised valuation, while an appraised value is a more informal estimate used by agents.
Yes, a market appraisal will usually be offered as a free service by estate agents.
A property valuation usually takes around 30 minutes but can take longer for larger or more complex properties.
An appraisal from an estate agent is usually free of charge but a formal property valuation for a mortgage valuation costs around £200 and a Red Book valuation will cost around £300 to £600.
Yes, a property valuation will be required for probate as a valuation must be submitted as part of the Grant of Probate application.
If you are applying for a mortgage to buy a new build property you will require a mortgage lender valuation. If you are selling a new build, an estate agent appraisal will usually be sufficient unless you are selling due to divorce or probate and require a formal valuation.
Now you know more about full valuations v market appraisals, as qualified estate agents and Chartered Surveyors it could be best to talk to us about your next steps. We cover areas including Holyhead, Menai Bridge, Gwynedd and Bangor.
Book an appointment for an appraisal of your home today.
Are you looking to sell or let your property? Take the first step and find out what your property is worth with a free no-obligation instant valuation.
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Williams & Goodwin The Property People are members of the Guild of Property Professionals, National Association of Estate Agents, Association of Residential Lettings Agents, National Association of Valuers and Auctioneers and are Chartered Valuation Surveyors we are members of a National Network of approximately 800 independently owned and operated Estate Agents.
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