A property valuation is an opinion of value prepared for a stated purpose.
It is not the same thing as an asking price, an online listing estimate or the highest price a neighbour says they were offered.
Why is a valuation done?
Common reasons include:
- sale or purchase
- mortgage lending
- insurance
- taxation
- succession
- financial reporting
- dispute resolution
The purpose matters because the valuer needs to know what question the report is answering.
What does the valuer inspect?
Depending on the property, the valuer may consider:
- location
- plot size
- tenure
- access
- permitted use
- building size
- condition
- construction
- services
- rental information
- comparable properties
For an income-producing property, the lease and rental records can be especially important.
Asking price versus value
A seller chooses an asking price.
A valuation uses evidence and professional judgement to estimate value for a defined purpose.
The two numbers can be different.
A high asking price does not prove that comparable buyers have paid the same amount.
What should you prepare?
Useful documents can include:
- title information
- survey or site plan
- building plans where relevant
- leases
- rent schedule
- rates or rent records
- details of improvements
Accurate information makes the valuation more useful.
Mortgage valuation
A lender may commission its own valuation when deciding how much it is willing to lend against a property.
That valuation protects the lender’s security position. It does not replace the buyer’s legal due diligence or physical inspection.
Valuation for stamp duty
Property transfers can also involve valuation for stamp-duty assessment.
Do not assume the duty will always be calculated from the seller’s advertised price.
See our stamp duty guide and land transfer costs.
When should a seller get one?
A formal valuation can be useful where the property is unusual, high value or difficult to compare.
For ordinary land, a seller may first use comparable evidence to set a sensible asking price. See how to price land in Kenya.
