House rebuild cost vs valuation?

FreddieFrugal

:hello: Hello

Am I correct in thinking that the 'cost to rebuild' - only figure given to me from mortgage valuation of the house we're intending to purchase - is not the same as a 'Valuation' of the property's market value? So therefore I shouldn't be concerned that the figure is quite a bit lower than the price we're paying - in fact it's to be expected?

I'm assuming that figure is just literally the cost to rebuild - not taking into account the value for then selling the house.

Only reason I ask is because I've read a lot of threads/posts discussing concerns over 'Valuation' being less than the agreed price. But I'm assuming that these 'Valuations' are actual market valuations and not just rebuild price which is what we seem to have been given.

Difference may be we only had the lender's basic valuation done, not a homebuyer's report or anything. Having done a very thorough inspection our selves and with knowledgable family members we didn't see this as necessary. We also know that the house is most definitely priced correctly (if not very generously!) for the area when compared with other similar houses.

SG27

The rebuild cost is different for the market value. You should use the rebuild cost for your buildings insurance.

Although I would expect the mortgage valuation to actually give the surveyors opinion of market value too, I thought that was the whole point? Could be wrong though.

FreddieFrugal

SG27 wrote: »

The rebuild cost is different for the market value. You should use the rebuild cost for your buildings insurance.

Although I would expect the mortgage valuation to actually give the surveyors opinion of market value too, I thought that was the whole point? Could be wrong though.

They may well have done but just not shared that information with us automatically. The rebuild cost appeared on the mortgage application tracking system online after the valuation report had been received and deemed to be satisfactory.

I have read on the lender's website just now that the report is only automatically given to the customer if the valuation was unsatisfactory and they need to give you the figure so that you can either renegotiate price or alter loan amount.

kingstreet

As part of the value of a property involves the land on which the property is built and this remains even if the property is a total loss, there is little connection between rebuild cost and property value.

Unless you have been notified to the contrary, the surveyor's valuation is the purchase price or estimated value given on the application.

Kynthia

The rebuild value is the cost to literally rebuild the property and is not the market value and doesn't include the value of the land either. You need to make sure your buildings insurance uses this rebuild value or more.

Edit: cross posted with Kingstreet.

robatwork

http://www.bbc.co.uk/news/uk-england-dorset-18505748

Cost to buy 170,000 = valuation
Cost to build about 15,000 = rebuild cost

FreddieFrugal

Thank you, :T

I did assume so, just wanted to be sure. It's purely because so many people have been querying their 'valuation' figures on here that I wasn't certain whether they were speaking about the rebuild cost which is all we got or the actual 'valuation' of property's market value.

Thanks for clarifying

FreddieFrugal

robatwork wrote: »

http://www.bbc.co.uk/news/uk-england-dorset-18505748

Cost to buy 170,000 = valuation
Cost to build about 15,000 = rebuild cost

Costs about £25,000 more than our 3 bed semi :rotfl:

robatwork

Sense < some people < more money