Bank Valuation

Bank Valuation

Bank Valuation Overview

As part of a loan application, most lenders will require a valuation to be carried out on the property that you are seeking a loan on.

The mortgage valuation is for the benefit of the mortgage lender. It is designed to give enough information for the lender to decide whether the property is safe to lend on, and up to what amount. In most cases, the bank will pay the valuer for their report but in some instances, you the borrower may be asked to arrange for the valuation to be carried out.

The valuation is based on the valuers knowledge of comparable prices in the locality. It may also give a “minimum reinstatement value”, which is the amount of money it would take to rebuild the property from scratch, should it ever be necessary. Later, the mortgage lender will ask to see evidence that a suitable buildings insurance policy is in place, together with confirmation that you are covered for the minimum reinstatement value

Selecting a valuer

Most banks will have a panel of valuers to choose from. Many of these will be chartered professionals and therefore be members of the Society of Chartered Surveyors Ireland. Ask to see if they are chartered because they are then required to carry out the valuation, to what is recognized as the international best practice, ‘RedBook’ standard.

Click here to read our Guide to Chartered Valuation Surveyors, the Red Book Valuation Standard and the Valuer Registration Scheme

 

Frequently Asked Questions

Valuation is a process of estimating what something is worth. Major financial decisions from home mortgages to major investments require much thought and consideration, therefore accurate valuations of the property being acquired is fundamental to good lending practices. Valuations underpin most financial decisions and reliable practice standards provide the foundation for high quality valuations.

Accurate valuation of property is of interest to many in the industry including those who develop, lend, trade or occupy property.

The Chartered Surveyor is widely recognised as the ‘go to’ professional for all professional services including valuations. The Chartered Surveyor operates across a wide range of asset types, working in both the public and private sectors.

Financial institutions that retain the services of an SCSI valuer can be assured that they are reducing their risk levels by dealing with a professional who is monitored and regulated to ensure that valuations are being carried out in line with international valuation standards (IVS) and recognised Red Book standards.

The Valuer Registration scheme is mandatory for all chartered surveyors carrying out Red Book valuations. This is a quality assurance product that audits members on a risk scoring basis where audits are carried out on a mix of desk based reviews and regulatory review visits to members.

Should any risks come to light, an initial assessment will be made. Further investigation will follow, including checking information against Red Book requirements and the processes and audit trails that members have in place.

Major banks/building societies/mortgage providers have backed Valuer Registration around the world, particularly in the UK and across Europe. They have done so because members will be monitored closely by RICS, which will lead to higher standards in the market place.

RICS Valuation – Professional Standards (the ‘Red Book’) contains mandatory rules, best practice guidance and related commentary for all SCSI/RICS members undertaking asset valuations. The Red Book is issued by the SCSI/RICS to promote and support high standards in valuation. The publication details mandatory practices for SCSI/RICS members undertaking valuation services.

An SCSI/RICS Red Book valuation, as recommended in guidance issued by the Central Bank of Ireland, will ensure that a consistent valuation approach and methodology is used in line with International Financial Reporting Standards.

The top international investors, financial institutions and regulations the world over, including international financial
institutions, regard the Red Book as the gold standard of valuation practice and a quality assurance mechanism to reduce risk in asset valuations.

The fundamental pillars which underpin Chartered Surveyors’ credentials include:

1. Expert local market knowledge
2. Technical expertise and qualifications
3. The highest professional and ethical standards
4. Independent regulation and enforcement.

The absence of statutory regulation in the practice of valuation, reinforces the importance of ensuring that those who undertake valuations are competent and qualified to do so.

This is in the interest of everyone in the industry that lend, develop, occupy or trade in property assets.

Find a chartered valuer in your area

 

Trust your valuation to a chartered surveor who is monitored and regulated to ensure that valuations are being carried out in line with international valuation standards (IVS) and recognised Red Book standards.

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