Talking Property: The cost of having a proper written valuation on your home can vary from a few hundred to a few thousand euro, says Una McCaffrey

We all like to think that we know what our property is worth, but the chances are that we will need proof of its value in the form of a written valuation. This differs from the verbal valuation offered free-of-charge by estate agents to potential vendors. In fact, it will often have no link to a sale at all, although it will still normally be carried out by an estate agent. This time, of course, it will carry a charge.

So when might you need this type of formal valuation?

One such situation has its roots in one of the fastest-growing trends in today's mortgage market: refinancing. This happens where a property-owner wishes to release some equity from his or her assets or, alternatively, wants to consolidate a number of outstanding loans into one mortgage. For this to occur, the lender will seek to prove the value of the house or other property being remortgaged and will call on an agent to do this. Usually, this involves the borrower choosing from a list of agents nominated by their bank or building society, with the client often paying for the valuation.

Simon Ensor, director of Sherry FitzGerald, says the cost involved depends on the property, but it will normally be modest for houses, running into the low hundreds rather than the thousands (a typical charge would be €127 plus Vat).

A colleague who recently had a country property valued for refinancing purposes paid €150 plus Vat for a two-hour consultation with an agent which included advice on developing the property and information on recent sales within a 20-mile radius.

A very detailed and more expensive valuation can be carried out in accordance with rules of the Society of Chartered Surveyors. Sean McCormack of McCormack Property Consultants, who is the general practice chair with the society, says these rules are not generally used for residential purposes, and will regulate surveyors rather than agents. It's an option but Ensor reckons that it could cost as much as €5,000 for a €2 million house.

Valuations are particularly common, according to Ensor, in instances where an owner has a portfolio of properties and wants to make sure that he or she is receiving financing on the best terms. Situations such as this could, according to Ensor, see the property owner paying for a valuation in advance of seeking finance from a range of lenders. This could also, however, ultimately lead to the borrower paying for two valuations on the same properties.

McCormack explains that all commercial valuations used for lending purposes will need to follow the strict rules of his institute. He suggests that valuations of this type will cost at least €1,500, plus Vat. Where valuation fees might be easier to negotiate, says McCormack, would be in "statutory" situations where the institute's rules will not strictly apply. This would include cases such as probate (an inheritance), where a sale (and the accompanying fees) might be coming at some stage soon and the valuation fee might thus be easier to barter on.

Valuations will be important in the case of probate because they will set the price for the property that will be used to calculate tax liabilities at a later date.

While commercial valuations will tend to be most lucrative for agents, the market has seen residential business grow over the past few years, partly due to the existence of divorce. Courts will tend to be involved here as the parties involved attempt to sever their financial links on a legal basis.

McCormack points out that this legal element places additional pressure on the valuer, who will need to be able to defend the valuation in court. This might then follow through into higher charges, with this type of service likely to cost about €1,000 at least, depending on the property involved.

Another, slightly different, valuation scenario will arise in the case of land sales of the type handled by Paddy Jordan of Jordan Auctioneers in Newbridge, Co Kildare. Jordan's experience with valuations is very different to that of city-based agents because of the land aspect of many property sales. While most valuations will occur in the same circumstances as those in urban areas (refinancing, divorce, probate) there is also a heavy emphasis on valuing farms as they pass from parent to child while the parent is still alive. The practice is also different, with Jordan literally needing to "walk the land" if he is to value it properly. This will help him to judge the "quality" of the land and see how it is being used at the moment - land dedicated to tillage will be judged differently to fields used to rear cattle or horses.

He will also refer to comparative valuations, and studies on the quality of soil in that area. An eye will then need to be kept on zoning, the magic status that can add millions to the value of a meagre farm. The cost of the service will then depend on the nature of the job and the volume of business that comes from the client, but valuations running into thousands of euros are not unusual. The flipside is that the valuation is being provided by somebody with specialist knowledge of a complicated business.

"Provided you're selling plenty, you'll know what's going on," says Jordan.