From selling and buying a home to refinancing your mortgage, a house valuation can play an essential role in numerous activities relating to your property. That’s because having a clear idea about how much your house is worth can help you make smarter decisions that’ll lead you to financial success.
The house valuation process is relatively simple; an estate agent inspects a property in person or virtually and collects information about it. Therefore, the purpose of a home valuation is to give people a professional, unbiased opinion about a property’s value. After that, clients get results about the fair value of a house based on the relevant market trends.
Another tool that can accompany a house valuation is the budget calculator. Besides that, sold house prices can also equip you with important pieces of information.
However, if you’d like to learn more about what home valuation looks like and what you can expect, make sure to keep reading.
Do you have to pay for a house valuation?
Many people want to get a house valuation. Whether you’re trying to sell or buy a property, a proper house valuation can ensure you are informed about the property’s market value.
There are many advantages of getting a house valuation. However, the two most important ones are related to the property lender and the property buyer.
Namely, a house valuation can help property lenders avoid lending more money than necessary while helping property buyers prevent paying more than the property’s actual market value.
Getting a house valuation is undoubtedly helpful. However, does that mean you have to pay for it?
Well, it depends. If you decide to go with an RICS surveyor, a house valuation will cost you between £150 to £800, depending on the property’s size, location, and other factors.
Some banks also do house valuations. However, these valuations usually come with a fee and connect to mortgages. Depending on the bank, your mortgage valuation could be free or cost up to several thousand pounds. You can also find banks that offer flat-rate fees for house valuations.
Another option is to go with estate agents. Many estate agents offer a free valuation, especially online. Nevertheless, most estate agents charge a fee for their home valuation services simply because the process can take a while and usually requires research.
For instance, estate agents need to carefully examine the local property market and find out how the properties in the area are currently selling. Besides that, estate agents need to collect essential information regarding other property features.
Most real estate agents use special software tools to do that, so they can quickly and easily offer pretty accurate information about a property’s value. Most house valuations by estate agents take somewhere between 20 to 60 minutes.
If you decide to have an in-person house valuation, you’ll most likely pay a fee to cover the estate agent’s travel expenses. Since these agents have to invest 2-3 hours of their time for a valuation, they need to charge a fee to compensate for their time and effort.
Besides travelling and assessing the property, a single valuation also includes some office work, so you could be looking at an £80 to £150 fee for covering all the costs.
Will estate agents value houses for free?
While you’ll generally have to pay for house valuation services, there are some cases where you could get a property valuation free of charge. These instances aren’t that common, but they do happen.
Firstly, estate agents will value houses for free if you choose a virtual house valuation. That way, estate agents don’t have to travel to the location, spend money on petrol, or look for parking space. That already cuts costs drastically, which is why many agents will offer this type of valuation for free.
Although you can’t expect online valuations to be as accurate as the traditional ones, they’re an excellent alternative if you’re looking for a more cost-effective option. After all, you only need to set up a meeting, turn on the camera, and give the estate agent a virtual property tour.
There’s yet another way to get a free house valuation by an estate agent. Many estate agents understand the power home valuations have, which is why they offer them for free. Namely, house valuations are the perfect way for estate agents to view the property but also pitch their services and sell their ideas to clients.
Since customer communication is a crucial part of the real estate industry, estate agents must do everything in their power to spend as much customer contact time with their potential clients as possible. With that in mind, many will value houses for free and work towards gaining interested individuals as permanent clients.
Therefore, estate agents can offer free house valuations; you only need to look for them in the right places.
How much does it cost to get a house valuation in the UK?
If you live in the UK and want a professional property valuation, you’re undoubtedly interested in how much the entire process will cost you. Even though it’s impossible to determine the price of a house valuation here since so many factors impact it, we can give you a few pointers to lead you in the right direction.
As appraisers can use several different methods to determine a property’s value, we’ll go through them here. Remember that these valuation methods are suitable in different situations, so you might want to check all of them out to select the best one for your needs.
Sales comparison approach
As one of the most frequently used approaches for determining a property’s value, the sales comparison approach is all about comparing a property to other properties in the area with similar characteristics.
For instance, if you’re trying to sell a 1,000-square-foot home with two bedrooms and two bathrooms, your estate agent will probably look at other 1,000-square-foot houses with the same number of rooms in the area. Then, the estate agent will compare your property to other similar ones, thus using the sales comparison approach.
The price will be higher if the property in question is in better condition than the other comparables. If the property is in worse shape, the price will be lower.
Cost approach
The cost approach works a bit differently. With this one, the value of a property is determined by examining the replacement cost of the property. To calculate the replacement cost, the estate agent considers how much it would cost to replace or reproduce the same building on the current plot of land.
Once the estate agent calculates the replacement cost, all that’s left to do is subtract depreciation and add the value of the land. As a result, you get a determined property value using the cost approach.
Income approach
Finally, the income approach can also determine the value of a property. The income approach is typically used for determining the value of investment properties that tend to result in a stream of income.
With the income approach, the estate agent can examine the expense statements, market conditions, vacancy rates, rental rates, and much more. Then, they can use the income and cash flow predictions to determine the property’s value more closely.
What are the different options for a house valuation, and how much do they cost?
Clients can choose from different options for a house valuation. Each option comes with unique features and services, so it’s only understandable all of them come at diverse price points. Let’s take a closer look at what these house valuations include.
Desktop valuation
Desktop home valuations are becoming an increasingly popular choice. With the global pandemic influencing every sphere of our lives, it’s no wonder home valuations have become virtual.
During desktop valuations, estate agents use online information to determine the value of a property. Public property records, floor plans, and comparable listings play a major role in desktop valuations.
The best thing about a desktop valuation is that it’s also the cheapest option since it doesn’t require estate agents to visit the property physically. You’ll likely pay a desktop valuation fee of between £65 and £200.
However, a desktop valuation doesn’t always provide you with the most accurate results. That’s why some loan companies or banks requesting a property valuation for a mortgage don’t accept it.
Hybrid valuation
A hybrid valuation is similar to a desktop valuation, except for a third party responsible for physically visiting the property. This valuation aims to combine the best of both worlds and complete an accurate property valuation quickly and easily.
Agents can complete their property assessments during hybrid valuations without physically visiting the location. Instead, a third party, typically another estate agent or appraiser, completes the in-person inspection. Then, estate agents combine their findings to determine a property’s market value more closely.
Hybrid home valuations run an average of £200 to £350. They are slightly more expensive than desktop valuations but secure much more accurate results, which is why more and more people choose this type of valuation for their properties.
Drive-by valuation
A drive-by valuation is what it sounds like precisely. This type of property valuation heavily relies on inspecting a house’s exterior. During a drive-by valuation, the estate agent never goes inside to check the rooms. Instead, they base the valuation on the exterior space assessment.
In addition, estate agents will go through public records and data to determine the property’s value more closely. The average cost of drive-by valuations is from £85 to £130, but most mortgage companies won’t allow these valuations for securing a home mortgage.
Traditional valuation
Traditional valuation, also known as full valuation, is the most common home valuation type and the property assessment we think of first when discussing home valuation.
A traditional valuation includes a full in-person assessment of a property where an estate agent visits the house, takes photos and measurements, conducts a short interview, and gathers all the other information necessary for an in-depth house valuation.
A full property valuation costs £300 to £400, although the cost can be much higher if you own a larger house or plot of land. A traditional valuation is the most prevalent type because it is the most accurate, and you need it to obtain a home mortgage.
Why is my valuation fee so high?
Since property valuation is a unique process to calculate the financial value of a property, it includes numerous factors. Let’s explore the essential elements that determine the property valuation cost.
Internal features
Internal features are among the most important property factors determining a house’s overall value.
Characteristics such as the square footage, the total number of rooms, the quality of materials for the construction, the presence of appliances, aesthetics, and others have the power to increase or decrease your property’s value drastically.
Since internal characteristics are the most important, ensure your house has plenty to offer.
External features
However, it’s not all about the interior. The exterior is also crucial, so external features are next on our list.
We could describe external characteristics as curb appeal. Although the exterior doesn’t have to do much with the fundamental necessities, it affects the overall quality of life. Hence, it affects the property value.
Real estate agents typically look at the exterior’s appearance, the size of the lot, the type of landscaping, and whether the outside is well maintained.
Location
Another significant factor that influences the property’s value is location. Even if you find two houses with identical lots, they’ll have completely different prices if they’re located in other cities or parts of the same town.
Although location is one factor, many characteristics affect it. For example, neighbourhoods with easy access to hospitals, schools, public transportation, grocery stores, and parks generally rank better than neighbourhoods with fewer amenities. Crime rate is also a deciding factor since the number of burglaries can impact a home’s value.
Current market trends
Housing market trends are constantly changing, influencing property prices and frequently changing them. Properties’ local supply and demand primarily define housing market trends.
When a property with specific characteristics is in high demand, the property value increases. Similarly, properties will sell for less if their supply exceeds the demand.
If your home valuation fee is significantly higher than the average, your property probably has some unique characteristics that other houses with similar features don’t have.
Whether that’s plenty of brilliant internal features, a breathtaking curb appeal, a prestigious location in the city, or a general high demand for that type of property, a higher valuation fee typically signals a higher house value.
If you happen to pay a higher valuation fee, you can rest assured the property offers something unique.
How is a valuation fee calculated?
As already mentioned, numerous factors can determine the value of a property. That’s why estate agents never rely on a single feature found in the house.
Instead, they gather as much information about the property as possible to draw a more detailed picture of the property, which will then ensure a precise valuation fee calculation.
Factors that real estate agents and appraisers consider when calculating the property valuation are:
- Building size;
- Land size;
- Location and neighbourhood characteristics;
- Number of bedrooms and bathrooms;
- Types of interior and exterior materials;
- Home type (single-family home, condo, townhome, etc.);
- House age and design;
- Style and view;
- Appliances;
- Unique amenities (fireplaces, decks, etc.);
- The general condition of the property;
- Home renovations and improvements;
- Recent sale prices of similar homes;
- Local housing market trends.
Real estate agents will carefully consider every detail of the property mentioned above to determine a home’s value accurately.
When calculating the valuation fee, estate agents will take the time for detailed market research and the time necessary for assessing the property as the two crucial factors for determining the cost.
Naturally, the bigger the property, the more extensive house valuation it requires, resulting in a higher valuation fee.
Conclusion
All in all, it’s not easy to determine the price of a house valuation in the UK. Countless factors determine the final cost of a property valuation. Although the general valuation price is around £80 to £400, depending on the approach and the valuation option, the price can be much higher if the estate agent works with a sizable or more complex property.
Whatever the case may be, we strongly recommend contacting Property Price Advice for the best home valuation prices and deals.