Home owners often struggle to figure out how much their property is worth. We should know because we speak to often confused home owners as far as the true value of their homes is concerned.

One of the favourite ways to determine the value of a property is to ask an estate agent to come around an dvalue the house. If some one is really serious, oten to buy then the services of a a qualified surveyor are called upon.

Most RICS qualified surveyors are independent and must adhere to the professional guidelines as listed in the Royal Institute for Chartered Surveyors Appraisal and Valuation Standards (Red Book).

The basis of a surveyor's valuation is often a property's market value. But the market value can mean different to different people. However it is defined in the Red Book as:

‘The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.’

It is clear that the value of the property should be determined what it will fetch on the open market, say through an estate agent.

One size does not fit all

The actual valuation is not science and therefore can be a controversial subject. For example, not that long ago when new builds were fashionable among investors, they were being valued at prices which could harldy be justified on th ebasis of local economics.

Developers were charging a premium and investors were willing to pay that premium in the hope that the house prices will continue to go up and they will eventually make a profit. However the prices paid for properties within a narrowly confined area of new builds were not a true reflection of the economics or the true supply and demand of the wider area.

This is where the above definition cae under severe criticism from various quarters.

So RICS issued advice to its members to take into context the new-build valuations in the wider economic environment as well as taking into account all market conditions, both in good times as well as in the challenging economic conditions.

That is why the companies specialising in buying the properties fast, when contacted, will advice how much they think the property may be worth but leave the final judgement to an independent valuer. After all any property is worth more to seller than to the buyer but asking an independent party to determine the true value is the best way, but not always without controversies.