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What is a Red Book Valuation?

What is a Red Book valuation?
The term ‘Red Book valuation’ is very well known to us here at GTH. We provide them to our clients regularly. However, what does it mean to the layperson who suddenly finds out that they need a red book valuation? 

If you have ever or will ever need to rely on the value of your house for the purpose of taxation or formal legal proceedings, then it is likely that you will be advised to get a red book valuation. 

Who can carry out Red Book Valuations? 
The difference between a market appraisal (commonly provided by estate agents when they visit you to hopefully market and sell your property) and a red book valuation is fairly significant but widely misunderstood.

In order to provide a Red Book valuation the surveyor must be a qualified member of the RICS and be on the RICS registered valuation scheme. This means that the surveyor is subjected to mandatory rules and procedures when providing a valuation, which are all outlined within the RICS Valuation Global Standards (known as The Red Book). A valuation is therefore formal and there is usually a charge for the service. 

What does it involve?
There are five methods of valuation recognised in the property profession, however, for most residential valuations, the comparable method is used. This involves comparing similar, recently sold properties that have been sold on the open market to establish a market value at the date of the valuation.

The date of the valuation is important, sometimes this can be when the property is physically inspected or it can be different, for example at the date of death in an inheritance tax valuation (commonly but incorrectly referred to as a probate valuation). 

A market appraisal is different primarily as it looks to the future - the market is appraised and as a client, you will be given an opinion of what the property will likely sell for after a period of marketing. The sales figure (guide price, asking price, OIEO etc.) provided during a market appraisal is very much a guide for potential purchasers who may choose to offer a different amount of money for the property and it would then be up to the vendor to choose if they accept or reject this offer. This is the case for most property sales which are sold via private treaty or informal tender but not usually for properties sold by auction or formal tender. 

Where can I get a Red Book Valuation? 
At GTH we provide both Red Book valuations and standard market appraisals. If you are considering selling your house then you will probably need a market appraisal.

For any valuations that require reliance on a valuation for tax or legal purposes, speak to us about booking in a Red Book valuation. Our local experts can advise and guide you through the process, so find your local office today. 

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