At Oakwood we deliver hundreds of property valuations each year, most of which start with the question “we need a valuation; can you give me a price please?”. Yes, of course we can, but first of all we’d like to know more about what you need and why.
In the dim and distant past, our professional body, the RICS, published standard valuation fees, but this practice has long been discontinued and fees are entirely determined by valuers and their firms. This can lead to questions from clients about why our fees are different (higher maybe) than other firms and some firms will do a “valuation” for free.
Free Valuations
The offer of a free valuation is a bit misleading. Estate agents offer these, but they are really market appraisals. This doesn’t make them wrong, but they are provided in anticipation of securing an instruction to sell a property. They are not binding on the agent and come with no insurance liability. They cannot be used in Court proceedings or for secured lending. Crucially agents may inflate values to secure instructions.
Fee Scales
As said above, there is no industry wide fee scale. Our starting point for quoting is our in-house fee scale, but we undertake a risk assessment of each enquiry. We shall consider below some of the factors that affect how much we charge for a valuation.
Professional Indemnity Insurance (PII)
It is a requirement that valuers hold appropriate PII and this impacts on the pricing between individual firms. Not every valuation firm is insured for every type of property. There can also be different terms and conditions imposed for different property types. Often insurers raise the excess for work that they regard as risky, such as secured lending, development sites, HMOs (houses in multiple occupation). Excesses can be significant. The impact of PII can affect the fee quote for a valuation.
Why is a valuation needed?
When you call us for a fee quote, we will need to understand the reason that you require a valuation. Most of our initial contact is with a lenders’ panel or solicitors. If you are borrowing money, then the lender generally deals with the valuer, as they have very specific instructions for the valuer to follow. It is not possible for a borrower to have a report prepared which they can then offer to lenders. It is important that we know the identity of anyone that will rely on our reports.
If a valuation is required for probate matters, or business reorganisation, then there is less risk (from the insurers’ point of view) and this will affect how we quote.
Leases and Occupation
If your property is let, or has third party occupation, then the fee may be increased to cover time spent reading and reviewing leases. The quality of lease can often affect the value of the property, for example a Full Repairing and Insuring (FRI) lease usually adds value to a property compared to one where the landlord has to deal with repairs.
Extent of Property
We will need to consider the time required for the property inspection. Therefore, we need to understand the extent of it. The valuer will need to see as much of the property as possible. It may be that we agree to inspect by sample, so for example if valuing a large farm, we may not walk every square inch but agree different areas that are similar.
Portfolios
If you require a valuation of a portfolio of properties, then we look to offer some discount on our usual fees. However, the work required can actually be no less than if we had inspected the properties on an individual basis. The key thing is for the owner to facilitate access and provide a logical order for inspections. We often find that tenants are not expecting us, or are out, or the owner’s keys don’t work. This can slow down our inspection and increase the time taken.
Extra Charges
When you instruct us to undertake a valuation you can normally expect to agree a fixed fee and this is referenced in our written Terms of Engagement. We may occasionally agree an hourly rate, or other fee basis, if there is some uncertainty as to the extent or nature of the property. This sometimes happens with probate valuations, for example, where the family are not fully aware of properties owned by the deceased.
When we undertake matrimonial valuations (as Expert for the Court) we are often asked to deal with “Supplementary Questions” and we make a charge for dealing with these.
We also occasionally make a charge if we have to reinspect, perhaps because access was not available at the appointed time; whilst we look to minimise these it will depend on the location of the property and the background to access.
How can we help?
Our valuation team are always happy to chat about your individual property requirements and work out how we can help you or your client. We don’t charge for an initial chat so please don’t hesitate to contact us with your enquiry. After all, picking up the phone is the best way to establish how we may be able to help you.
