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The process of buying or selling property whether it is residential or commercial real estate, a property valuation can play a significant role in all decision-making requirements. We will discuss what a property valuation is and all the ins and outs of why you might need one.
What is a Property Valuation?
A property valuation is a process used to identify the approximate true market value of a property intended for a sale, it is an estimate of what the market thinks your property is worth at a particular time.
A property valuation is conducted by a property valuer who is highly skilled and qualified in any specialised field of the property industry whether this is residential, commercial, industrial, or business related. For the most accurate and efficient property valuation report, there are a few things to consider when looking for the right valuation company.
- Qualified property valuer with over 20 years’ experience
- Registered as a certified practising valuer (CPV)
- Member of the Australian property institute (API)
- Specialised in the field of property related purposes you are interested in.
What goes into a property valuation?
There are various valuations to consider, depending on the type of property you are interested in and whether it’s for residential, commercial, industrial, or business related. The type of valuation service you choose will depend on the requirements you have asked for to be completed by an independent property valuer.
A valuation report will be completed by an independent property valuer, the report is a certified documentation that will include extensive research and data analysis to determine the fair market value of the property. The valuer will also take into account during the inspection of the valuation:
- Information of the property, including property type, use, size, and location
- Details of the property, such as its overall condition, materials used in construction, and fixtures and finishes
- Local market evidence from comparable properties, as well as the details of the properties a
assessment of the current market conditions
A Property Valuation is vital for informing decisions for many purposes, from buying or selling a property to future financial planning.
Why should I consider a Property Valuation?
Depending on your property related purposes, this will determine what valuation would best benefit your requirements. Whether it’s for residential, commercial, industrial, or business, there is a valuation service specific to your property enquiries. This may include but not limited to:
- Current Fair Market
The true value of the property, free from bias from potential agents or bank valuers.
- Stamp duty
Can help establish the costs involved when you’re transferring property owners and ownership.
- Capital gains tax
Is a tax on profit made through a property, if there is an increase in capital the amount has to be reported to the ATO and taxed accordingly. This valuation is used when:
- An individual moves out of their primary residence to rent it out for investment purposes
- An individual sells their investment property and will provide a retrospective report
- An individual moves into the investment property, as their primary place of residence.
- Pre-sale or pre-purchase
Pre-sale advice, will inform a financial standing and help determine the sale of your property
Pre-purchase advice, a comprehensive valuation, providing an accurate value of the property, giving insight into the local market potential, informing the choice to put in an offer on a property of interest.
- Retrospective
Also known as a back dated valuation, the property valuation performed to determine the value of the property at a certain date in the past. Research required must be relevant to the property market data and the local area comparison to properties sold close to the selected date for the valuation.
- Mortgage security valuation
An independent property valuation to determine the property’s current market value for acquiring a loan. A mortgage security valuation is the assurance of the lender to determine the risk of approving the loan
The difference between a property valuation and property appraisal
A Property Appraisal, usually offered by a real estate agent, is an informal valuation, usually free and is generally based on recent sales statistics of the local area and is not legally enforced.
A Property Valuation on the other hand, is performed and carried out by the qualified and licenced Valuers, who conducts extensive research into the local market and any external factors that may affect the property report outcome, these reports are legally enforceable.
As a property valuation has the element of legal liability, the property valuers are expected to adhere to property standards and regulations and will have to apply due diligence in their valuations and deliver information as accurately as possible.
In conclusion
Property valuations establish a property’s value based on a realistic assessment, conducted by an expert property valuer with extensive knowledge of the industry and based on various market conditions.
You may just want to receive an accurate value of the property to help inform any decisions you may have if you were wanting to sell or purchase a property. A property valuation is important to understand and gain insight into the area you are interested in and know that you aren’t paying more for a property and losing out on thousands.
Either way, it’s generally best to make sure you speak with our team of professionals to help determine what valuation service is best to move forward in your next property investment.
Author Bio
Timothy Evans – LinkedIn Profile
Timothy Evans has over 20 years’ experience in residential, commercial, and industrial valuations across the Brisbane metropolitan area. His expertise in property has led him to become an authority in his field and has become an expert in larger scale commercial property and development site valuations. In addition to being one of Brisbane Property Valuer’s leading Senior Valuers, Timothy often features as a guest lecturer and keynote speaker at conferences.
