Rics valuation on insurance website

Martisha

I was checking the price of building insurance on the comparison website of the house we intend to buy and in the end it did show me RICS valuation amount (cost to rebuild the house). The amount is £35k less then the price we agreed to buy this house for.
is this amount valid? Am I overpaying?

anselld

Rebuild cost can be higher or lower than the market value for all sorts of reasons.  It is not an indication you are overpaying.  The only indicator of market value is sold prices.
Plus a "RICS valuation" on a website is only an estimate based on the parameters you feed in.  You would need to pay if you want a proper RICS rebuild valuation.

chrisw

The buildings insurance valuation is completely separate from the actual house valuation.

The building insurance value covers the costs of demolition, clearing the site and rebuilding the house in the event of a total catastrophe such as it burning to the ground.

newsgroupmonkey_

chrisw said:

The buildings insurance valuation is completely separate from the actual house valuation.

The building insurance value covers the costs of demolition, clearing the site and rebuilding the house in the event of a total catastrophe such as it burning to the ground.

Theoretically, it should always be lower, because the empty land itself has a value.

user1977

newsgroupmonkey_ said:

chrisw said:

The buildings insurance valuation is completely separate from the actual house valuation.

The building insurance value covers the costs of demolition, clearing the site and rebuilding the house in the event of a total catastrophe such as it burning to the ground.

Theoretically, it should always be lower, because the empty land itself has a value.

It's often higher (e.g. rebuilding a mid-terraced house needs to allow for propping up the neighbours, restricted access, etc).

FreeBear

Rebuild values are OK if the property is a total loss and raized to the ground.

If you want a real shock,look at the rebuild costs on a damaged listed building - It could exceed the maximum insured value in quite a few cases, particularly if you have an intransigent Conservation Officer who is a stickler for detail involved.