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Are you wanting to buy a home? There are many factors to consider and at times this can be overwhelming especially as a first homeowner because you might not have known the many steps involved when it comes to buying a property. A home is a big investment so its important you have a clear idea and understanding of the property you are interested in, as well as the true market value compared to properties in the area that are similar. One of the most important steps when it comes to property especially when buying or selling is to inquire about a property valuation for the home you are interested in.
If you are new to all of this, and have only come across the term property valuation then you have come to the right place. A property valuation is an essential tool to have when looking to purchase a property, not only can this save you money in the long run but it will give you peace of mind when making decisons to purchase the right property and to know that its a good investment for your financial future potential.
Firstly, What is a Pre-purchase valuation?
As the term states pre-purchase, this is an independent third-party valuation to determine the true market value of the property you are interested in purchasing. The valuation is to give you an clear view of the property potential and where it stands within the market compared to similar properties. Unlike home appraisals, a property valuation is more reliable and is legally binding.
A the valuation report will have extensive research and data analysis, the valuer will take into account the following:
- Current condition (overall appearance) both interior and exterior of the property
- Fixtures and finishes that impact the overall appearance and value
- Any improvements or additions to the property that could add value.
- Damages or defects that need to be corrected
- Zoning restrictions of the property
- Environmental risk factors that may affect the future use of the property
- Recent Comparable sales
- Current market conditions analysed. The valuer will look into the past and present trends, both geographically and the property type.
The valuer will tak measurements and photos of the property during the inspection to get a more accurate idea of the property potential. The report will be detailed with all the findings that the valuer has inspected and analysed. The valuer may make recommendations of any possible renovations or improvements that could potential improve and add value to the property. They will also note any potential problems with the property which you would need to consider when purchasing that you may have not been aware of. These may include structural issues that could impact the life span of the property.
If a valuation isn’t something you require prior to your purchase, although we highly recommended them, you can still collect the relevant information to get an idea of the condition of the property you are interested in.
A previous valuation that may have been completed by the previous owner, electrical, gas safety checks and pest control report and you can also request a building regulation compliance certificate of the property to confirm if any prior renovations have been carried out and if so are they in accordance with current regulations.
There are numerous reasons why you would need a pre-purchase valuation and depending on your purpose, our valuers are able to tailor a service specific to your requirements for the valuation so you receive the best report outcome. Below are a few reasons why you would request a pre-purchase valuation, its not just for finding the value of the property our valuations can help with:
Mortgage Approval
The most logical reason for the valuation. Many homebuyer dont realise that there mortgage isnt based on a property’s listed purchase value. A lender will contact a valuer to determine the “market” value of the property which will then be based off whether you qualify for the mortgage amount or not. Valuers aare held to the highest level and the valuation reports are exceptionally detailed and theres various factors that are considered, with specific guidelines that are set by the lender.
- Size and shape
- Potential for development
- Structural defects and inefficiencies
- Type and number of rooms
- Age, layout, typogranphy of land
- Fixtures and settings of the property
Negotiation leverage
By having a valuation report that details all the data and value of the property, this will reveal issues that impact the asking price of the property. By having this report you have the upper hand on other potential buyers. Having the bargaining power for negotiating a lower price. You also have peace of mind that you wont be wasting your time on a proeprty that is unattainable, setting realistic expectations and helping you stick within your budget.
Keep in mind the valuation report is a legally binding document so you can defend yourself if any disputes were to arise with the seller.
Neutral Opinion
Being your first property maybe even your second, we all get attached when you believe you’ve found your forever home, but at times this could cloud your judgement and have you steered in the wrong direction. With a valuation their is no conflict of interest giving you accurate and honest findings, all the facts and figures of the property, which will set up up for the best approach for the sale as well as where you stand financially.
Playing an integral part in the buying process, a valuation report gives you peace of mind knowing the true value and that the property will be a good return on your investment in the future. For the best outcome, choose an independent valuation company that you trust, ensuring you get a tailored valuation service to suit your property related purpose. With a professional valuer that is specialised in the field you are guaranteed to receive the best outcome helping you make your property decisions alot easier.
Author bio
Henry Rivers is one of our top leading valuers, both registered and certified with the Australian property institute (API), with upwards of 20 years’ experience working in the Canberra property market. Henry’s expertise spans across all property types and purposes e.g. residential, commercial and industrial property.
