You probably think you've got a reasonable idea what your property is worth.
After all, so much data on house prices is now available online, alongside reports in the news about how the housing market is performing.
But property valuation is a complicated process - so much so that there are actually five different types of property valuation recognised within the property sector.
Types of property valuation
So many things can affect property values, but one key metric is the value of similar properties in the same area.
The comparative method is used to value residential and commercial property, but is very much dependent on market conditions.
So, from a residential property point of view, the sales market should be stable and there should be plenty of recent transactions of comparable properties in your area.
Once the comparable elements of your property have been analysed and the differences (better or wose) between your home and similar properties in the area have been taken into account, a valuation can be reached.
Largely used for commercial properties, the profits method can be used in a slow moving market with fewer transactions to base a valuation on.
Business properties like public houses and hotels lend themselves well to the profits method of valuation where gross profit is taken into account and expenses deducted in order to reach a figure that can be divided between a tenant (for running a business) and landlord (for property rent).
Used to value properties where there is development potential, or a piece of land that will be built on.
The residual method takes the projected development value less the cost of development to reach a valuation.
If comparative or profits methods cannot be used, often a contractor's method will be.
Residentially, this is usually the case if a property is unique and there are no similar properties with recent transactions to use comparatively.
The valuation works out the costs of producing a new but equivalent property and then adjusts the figure to reflect the age of the property being valued.
Useful for landlords renting out their homes, in particular Houses in Multiple Occupation (HMO) the investment method of valuation looks at a property and its ability to generate an income.
So, the valuer will look at comparable properties that have been sold and let in the area and will establish a revenue.
Then they will look at future rental income and work backwards, discounting that figure to the present day which will provide a valuation figure for the property.
Why and when might I need my property valued?
The most common reason for needing your property valued is if you are thinking of selling.
This will give you an idea what your property is worth and whether now is a good time to put it on the market.
But there are other people (and reasons) why a property might need a value placed on it...
If you are buying a property and have had an offer accepted by the seller, one of the first things your mortgage lender will require is a valuation of the property.
The lender needs to know that the property's value covers the amount of money they are loaning you as a mortgage - so they can get it back!
This kind of valuation is usually a quick process and doesn't involve a surveyor looking too closely at the property as they might during a proper survey.
After the death of a family member, you may have to have their property valued in order to calculate any inheritance tax due.
In the event of divorce proceedings, a valuation on a married couple's jointly-owned home may be needed in order for assets to be divided between both parties.
If a property is subject to capital gains tax, a valuation may be required in order to help work out how much tax is due.
Capital gains tax can be complex so you should always use a professional surveyor / valuer.
For buildings insurance policies, sometimes a more detailed valuation is required to establish the 'insurance' value of your home.
This would be used should your property be destroyed and rebuilding costs exceeded the average market construction price.