A property valuation is the process of developing an opinion of value for your property (usually market value).
A property valuation is usually requested by you or a lending institution that is looking to fund the purchase of a property.
A property valuation is a report that includes property information; location, rates, land and building sizes, physical condition of improvements, neighbourhood comparative sales information and other important property data or immediate issues that may need addressing.
People commonly discuss valuations when lending institutions are financing a certain property, which is an essential part of the home loan application process.
Banks usually requires a valuation, when obtaining a mortgage or refinancing to ensure that the property value secures the loan. If for any reason the mortgage is unpaid, the bank needs to be confident that it can recover any outstanding amount owing on the property if it had to re-sell it.
The lending institutions usually use licensed property Valuers.
When you are selling a house, or before you make an offer.
Valuers generally need to do a property inspection, which includes measuring and noting details on the building structure, its condition, structural defects, amount of rooms, building layout and their presentations, fixtures and fittings and any improvements.
Notes vehicle access, garages, carports or out buildings.
Valuations usually include photos of the property highlighting certain features.
Valuers usually look at location and planning and zoning restrictions. The Valuer then compares all these attributes to recent comparable sales in the surrounding area before coming up with the value estimate.
Property agents often give you a valuation on your property when they are trying to gain your listing, which is usually based on other sales in the area and their experience. One need to remember that property agents are working for the vendor who pays the commission on the price they achieve, not the official valuation.
This is different from a valuation carried out by a licensed Valuer, who has to base their report on facts as they are legally responsible for the information they provide.
A property sale may fall over on a valuation if the property’s value doesn't come close to the agreed sale price. A buyer, on behalf of their lender, could deem the finance clause is reason the property can’t go 'unconditional'. They may either decide to exit the contract or re-negotiate.
Here are some helpful pointers If you are looking to sell your house in the future and want to know what might help when the property is valued.
If you are thinking of selling your home or property but not yet ready to commission a property valuation you can get a free suburb report containing the sold prices of properties similar to yours, plus local median property prices and a snapshot of the area’s property supply and demand to help you better understand the estimated value of your property.
