Property Valuation vs. Condition Report: What Is the Difference?
A property valuation (verditakst) and a condition report (tilstandsrapport) are two different services. A property valuation gives an opinion on what the home may be worth in the market. A condition report describes the technical condition of the property, based on current rules and standards. In a residential sale, the condition report is normally the central document. In inheritance settlements, divorce, or refinancing, there is often a need for a property valuation.
Two different questions, two different answers
Many people confuse the terms, but the difference is straightforward.
- Property valuation (verditakst): What is the home worth?
- Condition report (tilstandsrapport): What is the condition of the home?
They address different needs and are often used in different situations.
Condition report: what is the condition of the property?
A condition report provides a systematic review of the property’s technical condition.
The building surveyor assesses relevant building elements and describes any deviations using TG-grades (condition grades) from TG0 to TG3.
The report is prepared in accordance with the regulations issued under the Norwegian Property Sales Act (avhendingsloven), using NS 3600 as the professional standard.
What does a condition report include?
- Visual review of the property’s building elements
- Examination of wet rooms, including inspection openings (hulltaking) where relevant
- Moisture measurement using suitable equipment
- TG-grades (condition grades) with descriptions of deviations
- Assessment of cause and consequence where deviations are found
- Cost assessment where this is appropriate
When do you need a condition report?
When selling a home, a condition report is not a strict legal requirement, but in practice it is expected in order to provide the buyer with sufficient information. When buying, the report gives a basis for assessment before bidding. In the event of a complaint or dispute, it can document the condition of the property at a particular point in time.
Property valuation: what is the home worth?
A property valuation provides a professional opinion on the market value of the home at a given point in time.
The assessment is based on an inspection of the property, an overall review of standard and condition, location and market conditions, and comparable sales.
What does a property valuation include?
- Assessed market value
- Technical value
- Potential land value
- Reasoning behind the valuation
When do you need a property valuation?
In inheritance settlements, it provides a basis for distribution among heirs. In divorce cases, it gives a neutral opinion on value. In refinancing, the bank may require documentation of value. For wealth tax purposes, it may also be used as supporting documentation.
The main differences
| Condition report | Property valuation | |
|---|---|---|
| Answers the question | What is the condition? | What is the value? |
| Basis | Regulations on safer property sales (NS 3600 as technical standard) | Professional judgement and market assessment |
| Content | TG-grades and deviations | Market value and valuation reasoning |
| Inspection openings | Where relevant | No |
| Purpose | Information about condition | Determining value |
| In a sale | Common and expected | Varies by market and situation |
| In inheritance/divorce | Optional | Often necessary |
Common misunderstandings
“Valuation and survey are the same thing”
In everyday language, people often use the word “survey” or “valuation” loosely, but professionally these are two different services with different purposes.
“The condition report tells me what the home is worth”
A condition report describes the condition of the property, not the market value. Any cost estimates relate to remedial work, not to the sale price. In some local markets, however, a value indication may sometimes be requested in connection with the report. This varies depending on local practice. In areas such as the Oslo region, the asking price is normally set by the estate agent as part of the sales process.
“The valuation identifies defects and deficiencies”
A property valuation is an overall assessment. It does not include the same technical review as a condition report, and hidden conditions cannot therefore be assessed in the same way.
Can you order both?
Yes. If you need both a technical review and a valuation, both can usually be carried out during the same inspection. This may be useful in a sale, an inheritance settlement, or refinancing.
What should you choose?
If you are selling a home, the condition report is normally the right choice in order to provide the buyer with the necessary information.
In an inheritance settlement or divorce, a property valuation is often the appropriate service in order to establish value.
If you are unsure, contact us and we will help you identify the right solution.
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