As Chartered Surveyors and Estate Agents in central London, we are often asked by property owners for a valuation of their property; occasionally there is some confusion as to what consumers understand to be a valuation, so we wanted to put the record straight and let you know the score! A valuation is normally a formal valuation undertaken by a qualified person (a Chartered Surveyor would comply) using what is known in the profession, as the Red Book. The Red Book is written by the Royal Institution of Chartered Surveyors (RICS) and is now becoming globally accepted.
An appraisal is normally carried out by Estate Agents giving an indication of what the property could be achieved in the market place based on their assessment of the local market and transactions. An appraisal is therefore not a valuation and cannot be used for lending/funding purposes.
A formal valuation is carried out for a defined purpose, for example:
- A Loan
- Inheritance Tax Calculations
- Capital Gains Tax Calculations
- Transfer of assets
- Personal Pension Plans (SIPP)
It will have to comply with the standards and guidance of the Red Book. It is a detailed report under specified headings.
An appraisal is a short standard letter mainly used by Estate Agents for obtaining instructions to sell or let a property. If an Estate Agent is a registered RICS member, they will now need to follow the guidance set out in the new Blue Book, produced and published by the RICS. This provides industry standards for Estate Agents who are RICS accredited.
A valuer carrying out a formal valuation has Professional Indemnity Cover and therefore a fee will be paid. Normally there is no fee for a market appraisal.
At Davis Brown we have RICS registered valuers and a team of Residential and Commercial Agents. If would like to discuss a market appraisal or a Red Book Valuation, please contact us:
No. 1 Margaret Street, London, W1W 8RB
T (44) 020 7637 1066