Is it advisable to obtain an appraisal or valuation when buying a house?

Why a professional's opinion is indispensable

The difference between a bank valuation and a building survey

Many buyers lull themselves into a false sense of security because the bank is financing the property. They think, "If the bank is giving me the money, the price must be right." This is a dangerous misconception.

The bank does carry out an internal valuation when you buy a house (usually a hedonic estimate), but this is primarily for the bank's protection, not yours.

• The bank valuation: It is purely statistical. It checks whether the price is plausible in comparison to similar properties in the region. However, it does not consider whether the heating might break down tomorrow.
• The technical valuation when buying a house: Here, a construction expert checks the physical condition on site.

A comprehensive valuation when buying a house by an independent expert reveals what the bank's software overlooks: the renovation backlog.

Protection against the "investment hammer"

A visually refreshed property (home staging) can hide serious defects. A professional valuation when buying a house looks behind the façade.

Typical cost traps that an assessment when buying a house reveals:

• Energy-efficient renovation: Does the roof need to be insulated or the oil heating system replaced?
• Pipes: Are the water pipes corroded (common in houses built before 1980)?
• Pollutants: Are there any signs of asbestos or formaldehyde?

If the valuation when buying a house shows that 100,000 Swiss francs will need to be invested over the next five years, this will significantly change your calculations. Without such a valuation when buying a house, you are buying a pig in a poke.

The valuation when buying a house as a negotiation booster

In a seller's market, as we often experience in Switzerland, buyers feel powerless. "Take it or leave it" seems to be the motto when it comes to price. But a detailed assessment when buying a house turns the tables.

If you can prove to the seller in black and white that the windows need to be replaced, you have hard facts. An assessment when buying a house gives you the arguments you need to push down the price.

The investment in an assessment when buying a house often pays for itself many times over through the price reduction alone. Even if the seller is unwilling to negotiate, the assessment when buying a house gives you the security of knowing that you are not being ripped off.

Costs vs. benefits: is it worth the expense?

Critics argue that an appraisal when buying a house costs money that would be better spent on furniture. How much does it cost?

• Brief valuation/inspection: approx. £500 to £1,000. An expert accompanies you but does not provide a written report.
• Detailed valuation when buying a house: approx. £1,500 to £3,000. Includes a written report and cost estimate for renovations.

Compared to a purchase price of £1 to £2 million, these costs are marginal (approx. 0.1%). If the valuation when buying a house prevents you from buying a property with £50,000 worth of water damage, that's the best return you can get. A valuation when buying a house is not an expense, but an investment in your security.

Especially for newcomers: understanding local standards

For expats, a valuation when buying a house is doubly important. Building standards and materials in Switzerland differ from those abroad (e.g. Minergie standards, condominium regulations).

A valuation when buying a house also explains what it means when an "easement" is entered in the land register or how the condition of the renovation fund for a flat should be assessed. If you are not familiar with the local conditions, you should never forego a valuation when buying a house.

When is a valuation mandatory when buying a house?

There are situations in which you should not even consider it:

• Older properties: For properties that are more than 20-30 years old, a technical valuation is mandatory when buying a house.
• Suspicious circumstances: Does it smell musty? Do you see cracks in the façade? In these cases, an appraisal when buying a house is necessary to provide clarity.
• Private sale: If no professional estate agent is involved, there is often no market-based pricing. A neutral valuation when buying a house protects both parties.

Conclusion

The question "Is an assessment useful when buying a house?" can be answered with a clear yes. It is the only objective anchor in an emotional process. While the bank only looks at numbers, the building surveyor checks the substance. An assessment when buying a house protects you from unforeseen costs, strengthens your position in price negotiations and gives you the good feeling of having made the right decision.

Don't rely on the property brochure or your gut feeling. Take advantage of the expertise of professionals. A valuation when buying a house costs little compared to what it can save you. If you want to play it safe when buying a property, make sure you include this valuation in your budget.

Find out about the options available at Loft to help you find the right property and make the process transparent.

Glossary

• Valuation when buying a house: A professional assessment of the market value and structural condition of a property by independent experts.
• Hedonic estimation: A statistical comparison method often used by banks for valuation when buying a house, based on thousands of transaction data.
• Building fabric: The physical condition of the building (masonry, roof, pipes). A technical valuation when buying a house checks for defects and ageing.
• Investment requirements: The amount needed for renovations in the short or medium term. A good valuation when buying a house explicitly shows these costs.
• Lower value principle: Principle applied by banks: For the loan, the lower value of the purchase price or the bank's internal valuation when buying a house applies.