The house valuation: a free agent appraisal or a paid valuer

The three kinds of valuation

The agent's appraisal. An estate agent visits, looks at the home, checks what sold nearby on the Property Price Register, and gives you a figure and an asking price. It is free, because the agent wants the instruction to sell. It is an opinion, and it can be optimistic for the same reason.

The lender's valuation. Before a lender issues a loan offer, it sends a valuer from its panel to confirm the home is worth the loan. It is a short visit and a short report, and it goes to the lender, not to you (though you pay for it, about €185). It can come in below the price, which cuts the loan. It is not a survey and says nothing about the condition.

The formal valuation. A written report from a registered valuer, with the method, the comparable sales and a value at a date. It is for when someone other than you needs to rely on the figure: a court, Revenue, a bank in a dispute, a sibling buying you out. It costs money and it has the valuer's insurance behind it.

All three are done by people with a PSRA licence; a valuer's licence is a separate category on the register.

When you need a paid valuation

You need a formal valuation when the number will be argued about, taxed or relied on by someone else:

• Probate. The value at the date of death sets the inheritance tax and the base cost for capital gains tax when the home is sold later. Revenue can ask how it was arrived at.
• Separation or divorce. The family home's value decides who pays whom. Each side may get its own valuation, or agree on one valuer.
• Capital gains tax. Where the gain depends on a value at a date (a home you inherited, or a home that was let for part of the time), a valuation at that date is the evidence.
• Buying out a co-owner, a sibling, or a partner: the fair price starts with an independent figure.
• A family sale. Stamp duty and gift tax are charged on the market value, not the price you agree, so Revenue expects a valuation.
• Transferring a home into or out of a company or trust.
• Local Property Tax, where your own valuation is challenged.

For an ordinary sale, the agent's appraisal and the Property Price Register are enough. For an ordinary purchase, the lender's valuation is enough; your survey is the condition check.

What it costs

The agent's appraisal is free. Most agents will do it even if you do not sell for a year.

The lender's valuation costs €150 to €250, usually about €185, paid to the lender or the valuer when it is booked. Some lenders refund it on drawdown. If the first sale falls through and you buy a different home, you pay for a second one.

A formal valuation from a registered valuer costs more, because it is a longer report with the valuer's insurance behind it. Fees vary with the home and the purpose; a probate valuation on a standard house is at the lower end, a valuation for a court case with a possible appearance at the higher. There is no typical figure in our costs config for it; ask for a written quote.

If two sides each pay for a valuer and the figures are far apart, a third valuer agreed by both costs less than a court deciding. Ask your solicitor.

What the valuer does

A registered valuer visits the home, measures it, notes its condition and anything that affects value (an extension, a right of way, a road scheme nearby), and looks for comparable sales: homes like it, nearby, sold recently, from the Property Price Register and the valuer's own records. The report sets out the comparables, adjusts them for the differences, and arrives at a value at the date you asked for.

For a historic date (a death, a separation, a date you inherited), the valuer uses sales from around that date and the price index since. Say what date you need at the start.

The report should say:

• the purpose of the valuation and who may rely on it
• the basis (market value, usually)
• the date of the value and the date of the inspection
• the comparable sales used
• any assumptions (that the title is good, that there are no hidden defects)
• the valuer's licence number and insurance

A report without comparables is an opinion, not a valuation. Revenue and the courts expect the comparables.

How to choose

For an appraisal: ask two or three agents, and check their sales on the Property Price Register. The spread between them is the useful part.

For the lender's valuation: you have no choice. The lender names the valuer from its panel. You can ask for the report, and if it comes in low you can ask the lender to look at it again with evidence (recent sales the valuer missed), but the lender decides.

For a formal valuation:

• check the licence on the PSRA's register, and that it covers valuation
• ask whether they are a chartered valuation surveyor (the SCSI's register) or a member of another professional body, which sets standards for the report
• ask whether they have done valuations for your purpose (probate, separation, Revenue) and whether they will attend if it goes to court
• ask for the fee in writing, and whether it covers a conversation with your solicitor or accountant
• ask how they will treat the date you need

An agent who sells a lot in your area can be a good valuer of it; a valuer who does not sell has no stake in the figure. Both are used. Your solicitor will know who the courts in your county accept.