How and when to do a property valuation

Knowing the real value of a property has many advantages, both if you are going to buy and if you’re planning to sell. A property valuation provides you with an objective calculation of the value of your property or future property, without attachment or sentimentality, allowing you to make better decisions regarding your purchase or sale.

When buying a new house, a valuation allows you to compare prices objectively, avoid overpaying for a property or at least know if you are paying a fair price for the property.

When selling a property, a valuation allows you to identify the advantages and disadvantages of your property and how these increase or decrease their value of your property in the market. It allows you to compare your property with other similar properties in the area to set a fair price, thus avoiding losing money for offering your house underpriced or conversely, taking a long time to sell because the price is high compared to other properties with similar characteristics.

There are two main methods used to for the valuation of a property:

Direct Comparison Method

This methodology is the most common, used not only in Australia but around the globe. It uses as a point of reference the value of recent sales and transactions of properties with similar characteristics in the area. This method is influenced by the value perceived by the market, which means the value of your property will be affected by the trends and needs of the current market in the local area at that point in time.

Summation Method

The value of the property is calculated by the sum of all its parts. The appraiser considers the size of the land, the meters of construction, the materials that were used to build the property, the conditions of the mediations and the strategic location of the property. Anything else that has a monetary value and is considered within the property as an asset is also considered.

So how do you get your property valued?

The process begins with a written request where the interested party describes the purpose of the valuation, including the method in which they want the property to be valued.

Once the valuation is approved, market research as well as an internal and external inspection of the property is carried out, evaluating the architecture, topography, materials used in the construction of the property, the land and construction are also measured, the number of rooms and other bedrooms of the property and their conditions are described. Any maintenance and renovation that the property has undergone can be added to the report and the valuation also includes an analysis of the property’s potential for construction or development. Location of schools, public transport, shops and other facilities within the vicinity of the property are also included in the report.

It’s important to choose a professional qualified to do property valuations, one with experience in the current property market and local area the property is in. Valuers are usually specialised in certain areas like industrial, commercial or residential property so this is important to consider.

If you need support in the process of buying a home we are always here to help! Give us a call on 1800 3 PEASY or contact us via our website www.peasy.com.au.