What is a property valuation?
A property valuation is usually conducted by a bank or finance company looking to lend monies to your purchaser.
It assesses the current value of your property in an open and competitive property market.
It can also be requested by you depending on circumstances, such as separation, settling an estate, re-financing or selling to a family member or a multitude of other reasons.
The finance company wants to ensure the value of the property covers the loan.
They want to be confident they can recover any outstanding monies should the mortgage remain unpaid.
Who does it?
A property valuation carried out by a Licenced and Certified Property Valuer either paid for by yourself or the buyer.
A report including photos and data is produced.
It includes property information such as rates, block size, details of construction, condition of dwelling, any issues and improvements made.
It also reviews comparative sales and market conditions.
How does the Valuer come up with an amount?
They visit the property, measure up, note property details, rooms, layout, its structure, condition and faults. Also presentation, fixtures & fittings as well as improvements.
They check parking, vehicle access and outbuildings.
Consideration is given to zoning, planning restriction, location and amenities.
The Valuer then compares and analyzes these attributes to recent sales which are considered to be comparable.
A single figure Legal & Sworn Property Valuation is arrived at, as well as a range.
What is the difference between a Property Valuation and an appraisal?
Simply a Valuer provides a Sworn Property Valuation which could be relied upon in court.
They have to base their report on facts as they are legally responsible for the information they provide.
Severe penalties apply if the Valuer attempts to mislead.
An appraisal however is the real estate agents’ opinion of your property value. Usually when trying to gain your listing.
They base their appraisals on other sales in the area and their experience.
Remember, real estate agents are working for the vendor (which could be you) who pays the commission on the price they actually achieve, not the official property valuation.
The difficulty with comparing appraisals is that some agents simply bid the highest price which may have nothing to do with real value or that a buyer is likely to pay.
So, here’s a warning… don’t just fall for being told the highest price. It’s flattering, but may not be true.
Why is the Property Valuation important?
A property sale may fall over on a Property 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 the price.
How can value be increased?
These are a few considerations to be made before you go on the market and sell.
You cannot change the location, but you can change the house.
Preparation is the key.
Make sure everything is clean and well organized.
Don’t bet on something looking OK or ‘holding up’ until just after the sale.
Make the investment in whatever improvement needs to be made.
You need to be thinking long term with these improvements, their impact on your home value could be important.
Make your home look the best.
One of the biggest aspects of kerb appeal is the landscaping.
A beautiful home can get dinged by an unkempt front yard with weeds and unruly grass.
At the very least clean up the front, make sure the lawn is mowed, weeds pulled out, leaves collected and that there’s no rubbish.
Ensure the exterior looks inviting.
Check the Appliances
Have you checked all the appliances?
Make sure if they’re not new that they’re all running efficiently.
A malfunctioning large home appliance can certainly impact your home’s value.
So, if need be you should replace the appliance or check your warranty and call the manufacturer to see if you can have repairs done.
Be a proud owner
By this I mean just show your home is taken care of because of your proud ownership.
We won’t go in-depth on specifics here… just show you really care about your home.
Proud ownership is certainly reflected in the quality of the home.
Cost does not equate to value
We discussed how minor improvements can make a difference to your home’s overall value.
However, not every single improvement you try to make will bring up your home value.
Understanding that will make the valuation process much easier.
Understanding effective economic return is very important when it comes to home value.
Before you make huge expenditures you need some idea of how much value they will add. – Ask us.
If you are selling in the foreseeable future, this does not necessarily mean a huge undertaking or enormous cost.
For example, if you do not have solar power, now is not likely the time to add it.
Nor is it time to do major renovations unless you discuss it with your agent first.
Consider re-painting, updating worn floor coverings, a mini-makeover in the kitchen and wet areas.
Make it superbly clean, tidy and most of all inviting.
To find out more, you’re welcome to call 08 83961100 to arrange a chat with people that care.
Alternatively Book a Free Consult or Get Your Home Value Here.
Feel free to browse the rest of our Blog for more tips tricks and helpful info you can use.
Not sure of some of the terms & meanings used? Check our comprehensive Glossary and Abbreviations!
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