When it comes to determining the value of matrimonial property, there are many terms thrown around, like property valuation and market appraisals. While these terms may be used interchangeably, each is a different type of property evaluation with separate calculation methods that make all the difference in divorce proceedings.
In the UK, under the Matrimonial Causes Act 1973, assets are usually divided equally among divorcing couples, including matrimonial property, such as the family home. This asset is often the largest and the main point of contention, especially if there are any concerns regarding its value. Therefore it is critical to have an accurate picture of its worth to ensure both parties get their due.
This article explains and compares the variations estate agents and RICS chartered surveyors have when it comes to matrimonial property valuation so that divorcing couples can make the best choice.
Who Are Estate Agents?
Estate agents, also known as letting agents, are property professionals who work on behalf of their clients to buy, sell, rent, or lease properties. Generally, services include market appraisals of properties, advertisement, marketing, property viewings, negotiations, and sales agreements.
How do estate agents value property?
Estate agents have various approaches to valuing matrimonial property in terms of how much it can be sold for in the current economic environment, known as a market appraisal. Depending on their methodology, they may or may not inspect the property before providing an estimate.
If they do inspect the property, they look at the general conditions, layout, and unique features, also noting any renovations and improvements that may have been made.
Moreover, estate agents look at external elements around the property when determining the market value. School catchments, local amenities, public transportation access and future development plans in the area can influence the property's desirability, which, in turn, affects how much it can be sold for.
Common methods employed during this process are listed below:
- Comparative Market Analysis (CMA):A CMA compares the matrimonial property to similar properties in the area, taking into account the condition, size, features, and sales price. Estate agents use this to gauge the estimated value of the marital home in terms of how much it will sell in the current market.
- Local Market Knowledge: Experienced Estate agents often rely on their local property market knowledge to assess property values. This includes their personal expertise on:
- Current market trends
- Market conditions
- Demand-supply fluctuations
- Recent sales activity in the area
- Buyer preferences
- Online Valuation Tools: Agents may also leverage online valuation databases and tools that assist them in developing estimates using historical sales data and market trends.
- Professional Networks: Estate agents consult professionals in their network, such as surveyors and other industry experts,who can provide clearer insight to help agents determine a more accurate valuation.
Note that there is no legal requirement for estate agents to develop a formal report or disclose their calculation methods. Furthermore, their assessments are not official valuations and cannot be used as evidence in court.
Who Are RICS Chartered Surveyors?
RICS chartered surveyors are qualified individuals with expertise in property valuation, land surveying, construction, project management, and real estate investment. These professionals work according to the guidelines set by the Royal Institute of Chartered Surveyors (RICS).
The RICS is a globally recognised organisation founded in 1868 that sets high standards and promotes best practices to maintain integrity in the property industry. Its regulations and guidelines are periodically updated to reflect changes within the industry so all real estate deals are done as accurately as possible.
How Do Surveyors Calculate Valuation?
For property valuation, every RICS chartered surveyor must adhere to an official RICS publication known as the Red Book, which lists the standards that surveyors need to follow to calculate the value of a property consistently.
Key features of the Red Book include:
- An emphasis on objectivity, impartiality, and transparency
- Standards for property data collection, analysis, and reporting
- Clarity on terms of engagement, such as the scope of work matters to be addressed and disclosures to be made
- Rules for the basis of valuation, including material considerations and assumptions
With these guidelines in hand, a chartered surveyor follows a specific approach to assessing the value of a matrimony property, as listed below:
- Initial Inspection: The surveyor begins by inspecting the exterior and interior of the property in question to gather relevant information such as layout, size, condition, and any unique features. Photos and measurements are usually taken during this inspection.
- In-Depth Market Research: The surveyor then conducts in-depth research on comparable properties in the local area to assess a baseline to the current market value, considering factors such as property features, location, recent sale prices, and market conditions.
- Valuation: Depending on the information gained during the first two steps, the surveyor applies appropriate valuation methods to evaluate an opinion of value. Common approaches include:
- Sales comparison approach, which compares the matrimonial property to recently sold similar properties in the area while making adjustments for specific features, size, condition, and location to arrive at an opinion of value.
- Income-based approach, which may be used if the matrimonial property generates a rental income and looks at rental rates, capitalisation rates, and operating expenses to calculate a value.
- Cost-based approach, which may be used in the cases of new or unique properties. Here the surveyor may assess the cost of constructing a similar property from its foundations while considering land value and depreciation.
- Consideration for Matrimonial Factors: A surveyor may also consider additional factors related to the property division, such as any legal restrictions, any agreements between the parties, and unique circumstances that may be present.
With all the information gathered, the surveyor prepares a comprehensive matrimonial property valuation report specifying the findings, calculation methodology, assumptions, and final opinion of value. This report is legally binding and can be presented in court during divorce proceedings.
Estate Agent vs. Surveyor
For easy comparison, we have highlighted the most significant variations between estate agents and RICS Surveyors when it comes to matrimonial property valuation:
| Estate Agent | RCIS Chartered Surveyor |
| Do not follow any set guidelines or regulatory organisation | Follows the standards set by the RCIS and must adhere to its guidelines |
| May or may not inspect the property | Must inspect property |
| Estimates may be influenced by personal knowledge and prior experience | The estimate is objective, and surveyors do not use their personal experiences to derive valuations. |
| May or may not provide a report | Provides a comprehensive report detailing findings, considerations, and assumptions |
| May or may not disclose valuation methodology | Must disclose valuation methodology |
| The estimate is not admissible in courts, nor can it be used in divorce proceedings. | The final report and estimate are legally binding. |
| A valuation can vary from agent to agent. | Valuations will be in a closer range as all surveyors must adhere to the guidelines of the Red Book. |
Ensure Accurate Valuation
An accurate matrimonial property valuation is the key to reaching an agreeable settlement for divorcing couples. Ultimately, an RICS chartered surveyor can provide the objectivity and legal validity that works in the best interest of both parties.
At Aston James Associates, you can rest assured that our RICS chartered surveyors will adhere to the highest industry standards to assess your marital home properly and professionally.
Visit our website to learn more about marital property valuation, or contact us today to discuss how we can help you get an unbiased valuation for your divorce settlement.
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