Which valuation method is typically used when a property is changing hands for the first time in 20 years?

Which valuation method is typically used when a property is changing hands for the first time in 20 years?

• A. Basic valuation.
• B. Desktop valuation.
• C. Drive-by valuation.
• D. RICS Home Survey Level 1.

Answer: (A)

The situation tests understanding of standard mortgage valuations. For most property purchases, lenders use a basic valuation as the first, quickest check to confirm the loan amount is supported by market value. It involves a limited inspection (often with some checks of obvious defects) and uses comparable data to arrive at a value that gives the lender security for the loan. This approach is chosen because it is cost-effective and fast, which suits routine sales even if the property hasn’t changed hands for a long time. If a buyer wants more information about the condition and potential issues, or if the property has unusual features or risks, they would typically opt for a more detailed survey option (such as a Home Survey) rather than the basic valuation. The other methods—desktop valuations (no site visit), drive-by valuations (exterior inspection only), or a full RICS Home Survey—offer different levels of detail and are used in different circumstances, but they aren’t the default for a standard mortgage on a typical resale, including one that hasn’t changed hands in many years.

The situation tests understanding of standard mortgage valuations. For most property purchases, lenders use a basic valuation as the first, quickest check to confirm the loan amount is supported by market value. It involves a limited inspection (often with some checks of obvious defects) and uses comparable data to arrive at a value that gives the lender security for the loan. This approach is chosen because it is cost-effective and fast, which suits routine sales even if the property hasn’t changed hands for a long time.

If a buyer wants more information about the condition and potential issues, or if the property has unusual features or risks, they would typically opt for a more detailed survey option (such as a Home Survey) rather than the basic valuation. The other methods—desktop valuations (no site visit), drive-by valuations (exterior inspection only), or a full RICS Home Survey—offer different levels of detail and are used in different circumstances, but they aren’t the default for a standard mortgage on a typical resale, including one that hasn’t changed hands in many years.