An estate agent in North Somerset is considering charging divorcing couples a fee for a property valuation following a post-pandemic surge in separations.
Andrew Simmonds, a director at Parker’s Estate Agents in Backwell, told the North Somerset Times that the surge in valuations is having an adverse impact on his firm’s business.
Agents are being booked in to provide property valuations for divorcing couples, which often do not end up on the market. And Simmonds says that it is becoming such a big problem, that he is being left with little alternative but to charge a fee for valuations involving divorcing couples.
He said: “We’ve seen an increase in the number of couples contacting us for home valuations for divorce purposes.
“As a business we are obviously delighted to meet prospective customers but divorcing couples can present a challenge that can leave us between a rock and a hard place.
“Valuing a home for a divorce is never easy and can often be a fraught process. Each party always has a different view on valuation.
Simmonds said that he recently found himself in “a domestic altercation between an estranged pair” that has prompted his thinking on a potential charge for divorcing couples.
He explained: “Emotions were clearly running high, and I literally walked into a full-blown argument between the couples and found myself having to mediate.
“I had to remind them that I had spent time researching and visiting the property and would be putting that information into a formal valuation letter to them, all without any certainty of an instruction at the end of it.
“I still provided the valuation but wondered whether it’s time to start charging for divorce valuations and to deduct from our final fee if we were successful in being appointed to market the property.”
Simmonds believes that people who are separating a dividing their property asset should consider a more formal valuation such as a RICS Red Book valuation that requires a fee if they are looking to buy one-another out of the property.
He added: “If a divorcing couple intend for one partner to stay in the family home and receive money from the other partner then an RICS Valuation is best.
“I would say only contact your local estate agent if the plan is to sell the home and split the proceeds.
“The price the home is marketed at can then reflect whether a quick sale is needed or whether the parties are prepared to wait a little longer to maximise the price.”
Comments (10)
A firm of accountants and Solicitors can charge for every document they create and clients are expected to pay.
With agents people expect us to drive to a valuation be on time, give them our professional advice and like you said mainly mediate between peoples emotions and do that all for the buzz of the instruction!?!? We have to very careful who we service and decide to work with. As when you are a fee only based service that should be your main skill. Deciding on the right clients who want to pay for your service.
The basic rule is that if you charge for it you can be held liable for its contents. No fee = no liability. That’s why you must call it a ‘market appraisal’ not a ‘valuation’.
I would be very surprised if (as suggested elsewhere) your PI insurer would cover it; generally it is excluded. If you want to be a surveyor then get a RICS qualification.
We do them for free, with a disclaimer on them too, as they are good PR and often do result in a sale. In fact we have one completing today and have three others this year totally circa £20k in commission, so not such a waste of time really……
They can be a pain I’ll grant you, and sometimes solicitors get both sides to get three each, so the occasional property can get six agents round! That’s rare though and we’re all used to taking the rough with the smooth in our trade.
Actually I think it’s a bit arrogant to say you’ll only be helpful on the appraisal, if you’re promised the sale back. Just sayin’.
We have been charging for matrimonial / probate valuations for years, not least as you are liable under your Professional Indemnity insurance, and we refund if instructed to sell. I have come across some Probate valuations by competitors where the client has paid far too much tax ( last one was £8,000 ) as the negotiator didn’t know the difference between an MA and Probate val. They were compensated by the corporate agent when they complained through their lawyer.
Congratulations, I read this with growing despair that no one was going to point out the obvious. Whilst happy to offer advice for sale purposes, anyone setting out a written valuation for probate, matrimonial disputes, estate planning or more complex ownership issues needs to rely upon their professional indemnity in the context of the higher likelihood of it being challenged in court.
Hence a fee, normally credited against any subsequent sale, should be charged to trigger such indemnity.
Freeloaders, often encouraged by the naive, will imagine a simple opinion of value will suffice and seek the easy route of getting a few such opinions from local agents. This may be fine for a comparatively low value property where the value of the estate is unlikely to trigger IHT, but they should be aware that when the District Valuer queries the figures some months later, they had better have contemporary evidence to support their figure, rather than offer a gut feeling based on the recent sale of a nearby property.
If estate agents ever wish to be regarded as professionals, this should not pose a problem, even if Johnnie-come-lately down the road makes no such charges.
“the negotiator didn’t know the difference between an MA and Probate val” – in theory, there is no difference between the value for Probate or Inheritance Tax purposes and Market Value as the value of a property that forms part of the estate should be estimated as the figure that the property would achieve if offered for sale on the open market as at the date of death, willing buyer and seller etc.
In practice, because the best that anyone professional can do is estimate a range wherein the likely market value lies, valuations for Probate purposes are likely to come in at the lower end of that range whereas it is also likely that a property that is going on the market will come on at the higher end of the range. It is also the case that for Probate purposes, you can get away with a slightly lower figure because only a small proportion of cases are checked and HMRC themselves don’t really have any idea of how much 10 Acacia Avenue might really be worth.
It is still the case, though, that there is no difference between MA and Probate Val.
I used to get fed up with the number of people who would call you out for a “free valuation” when you would then find out that they wanted to get a figure for divorce, “thinking of an extension” or worse, so that they knew how much to put it on for when marketing privately! It was also an additional irritation to often find out that they had been told to get a “free valuation” from an agent by their lawyer. I wondered what would have happened if I had sent a client to a lawyer, telling the client that the lawyer wouldn’t charge them for the piece of work required.
Agents make a rod for their own backs by pushing the “free valuation” message. I often took calls from people asking if we did “free valuations”, to which the answer was that if the customer was thinking of selling, we would, of course, be very happy to visit to appraise the property, discuss marketing and give an opinion as to the likely sale price that could be achieved, all at no cost.
If the “free valuation” was for another purpose, we would need to know what that purpose was, in order to establish the valuation approach required and the cost. If you are asked out to provide a “free valuation” and it turns out the customer wants to use your “valuation” for insurance purposes, you could be in deep do-do when the customer finds out that he is either over insured or, much much worse, under insured; one of which is quite likely if you insure your property for it’s market value, as any professional agent will know.
Many agents are not are, as SW73 comments, that they could be held liable in a court for their “free valuation”.
And, before anyone says it, I do hear the arguments put forward by Diogenes and bchurch but how much do you want to be taken advantage of? If you are busy and have a good property stock, you should always be prospecting for leads but there are good leads and there are bad leads – in my view and experience, the “free valuation” for divorce purposes are far more often likely to be a bad lead.
Scruffy hit’s the nail on the head and rather more succinctly than me. Took me so long to type my post in reply to SW73 that Scruffy got in there first!
There is a big difference between a market appraisal and a valuation, of which the latter should come out lower than the former, unless the vendor is highly motivated.
I don’t understand why agents have difficulty charging for the additional work in assessing value of a property as oppose to assessing a marketing price. Probably fear borne out of misapprehension; the same as agreeing low fees.
A very short sighted view. When I was going through a divorce, the assistance provided by local agent was immense. I always recommend him even though I didn’t sell the property. When I do, he will be my first call.
Parkers big call to action on their website says ‘Book a free valuation of your property’ – It doesn’t say ‘unless you are getting divorced’.
Remember also, a divorce can lead to one person need to find another home too.
Incredibly short sighted view… Who will they remember positively and come back to when you do need to sell? Or recommend to friends and family?…
Nothing new, we’ve been doing it for years and refund it when instructed to sell.