One question that we get asked is; ‘what is the role of a Chartered Surveyor, and why do I need one to conduct an official valuation?’. This is an important question to ask because if you are required to present an official valuation report, it will typically only be accepted if it has been carried out by a qualified professional, or in other words, a Chartered Surveyor.
What is a Chartered Surveyor?
A Chartered Surveyor, broadly speaking, is an individual who is qualified by the Royal Institution of Chartered Surveyors (RICS), whose job relates to land, property and construction. In truth, a Chartered Surveyor role can cover a variety of disciplines, one of these is property valuations. Before explaining the role of a surveyor within this job, one should ask, what is a property valuation?
What is a property valuation?
In most cases, the client requires to understand the Market Value of the property. A property valuation is an assessment of a property’s value that considers a range of factors, taking into account typical characteristics like size, layout, specification, condition and location. This will then be compiled into a comprehensive, detailed report which would state the Market Value. It is also important to state this report will tend to exclude non-permanent property features such as furniture.
What is the role of a Chartered Surveyor?
So what exactly is the role of a Chartered Surveyor? In order to carry out valuations of real estate in a jurisdiction, the surveyor must also be a Registered Valuer. This is important because it provides confidence to the clients that the job is being carried out in accordance with the set standards. A Registered Valuer will usually work with trainee valuers who are overseen by a qualified person. The role of the valuer is to provide an unbiased and independent valuation for their clients, whilst adhering to the standards.
What is the process of a property valuation?
Conflict of interest check and due diligence
When a client instructs a Chartered Surveyor/Valuer to conduct a valuation, the first step is a conflict of interest check. If there is no conflict, then the valuer can begin the due diligence. Before a visual inspection can take place, the valuer will research the area in which the property is located and note down aspects that would influence the value of the property. This would include the local geography, proximity to amenities, and transport links, to name a few.
The valuer should receive property information from the client, prior to visiting the property. Information that should be supplied to the valuer depends on the type of property, but generally includes floor plans, Title Deed, lease terms, and occupancy status. Online databases which use the latest technology and data would also be utilised, providing details of nearby properties such as recent sales and leases. The above work would form the basis of a desktop valuation.
Visual and desktop inspection of the property
A full visual inspection is the suggested inspection method in order for the valuer to gather the most information possible, however, in certain circumstances, there are different ways an inspection can be conducted. A desktop valuation, which will be conducted without the valuer visiting the property, a drive by valuation, in which the exterior of the property is inspected, a partial visual inspection, whereby certain elements of the property will be inspected internally, and lastly, a full visual inspection, where the property is inspected by a valuer from both internally and externally.
What are the factors impacting a valuation?
During an inspection, the valuer will check that the information provided matches the actual property and check the condition of the property. Site notes and photographs will be taken for others in the team to check. A valuer will look for potential defects of the property, such as damp, cracks and other damages. Any renovations/upgrades that have taken place will also be considered. The duration of an inspection will vary depending on the size of the property.
Aside from the property itself, there are other factors such as geography, the local environment must be addressed. This may include whether it is in a danger zone (i.e. is it on a flood plain) noise levels, or if it is in close proximity to busy streets, or above a shop. Community and/or building amenities and facilities are also considered e.g shopping centers, parks, gymnasium, swimming pools.
The next stage is to evaluate all of the data and information obtained, as well as use their own extensive market knowledge of the area. Based on all of the findings and data obtained, the Chartered Surveyor will then create a detailed comprehensive report detailing the findings, along with the valuation.
Can I get an appraisal instead of a valuation?
Can I just get an appraisal instead of a valuation? This depends on the purpose of enquiring about the Market Value of the property. It is worth pointing out that a property valuation is different to a market appraisal. An appraisal is simply an approximation or an opinion of a value, often given by a real estate broker. An appraisal cannot be relied upon by a third party such as a bank or insurer.
A valuation report by a RICS Chartered Surveyor on the other hand is the result of detailed empirical evidence and research conducted by a qualified and experienced professional, which can be relied upon. It is for this reason that if you require a valuation for specific purposes, such as taxation, auditing or mortgage purposes, a valuation report is required to be conducted by a Registered Valuer.
If you require an independent valuation report for a residential, commercial or industrial property, CRC has a team of highly qualified Chartered Surveyors on hand. For more information, contact us today to book a meeting.