Your Guide to Property Valuation

When you are ready to buy a property, buy a second home using your current property as security for a new mortgage, you are looking to sell and move, or you want to find out your current financial position, a property valuation will enable you to find out what your home is worth.

When you compare the value of your home to the remaining balance on the mortgage over the property, you know how much equity you have.

The property valuation will not give you the market value of the property. To find out how much you might sell the property for, you would get an appraisal from a real estate agent, or if you just want a rough idea of how much you might sell your property for, based on similar homes in you area, you can enter your address into the Domain website.

The purpose of a property valuation is to get a professional assessment of the value of your home, based upon a full inspection of the building and land, combined with research and analysis of the local market, to give you a figure and a detailed report on the factors that influence your property value at this point in time.

The final figure may be less that a real estate appraisal that reflects how much you could sell the property for in a best case scenario.

This information will prepare you to make a fully-informed choice when important financial decisions arise.

When should I get a Property Valuation done?

You would consider getting a formal property valuation when you:

  • Are considering buying a new home, to ensure you get a fair price at settlement.
  • Refinance an existing home loan - a property valuation is usually required by your lender.
  • Process a family or partnership settlement.
  • Inherit property from a deceased estate.
  • To make sure you pay the correct amount of Capital Gains Tax.
  • Take out building insurance.
  • Set the rent on a property you own as an investment.

What does a Property Valuation involve?

A property valuation is a detailed assessment of the actual value of your home and land. It includes all of the attributes of your property, its location, size and nature of the land, the building structure and condition, as well as rates that are paid by the property owner.

The property valuation report prepared by a professional valuer will include details on how the following features affect the value of your home:

  • Location
  • Building structure and condition
  • Building and structural faults
  • Access, including good vehicle access and a garage
  • Planning restrictions and council zoning
  • Standard of presentation and fit out
  • Number and type of rooms, fixtures, fittings and improvements.
  • Comparable sales in the area
  • Local housing market conditions

To perform the complete valuation, a professional property valuer will need to visit the property. They will measure the size of the land, rooms and buildings, and make notes on the building structure, condition, vehicle access and other features. The valuation might include photographs of the property to highlight its features.

A formal professional valuation will usually cost a few hundred dollars . For this fee, you will get a comprehensive report on the value of your home, and the factors that affect this final figure.

If you want to get a quick, rough idea of how much your property might be worth, you can check a recent bill from a statutory authority such as a council rates notice.

What is the Property Valuation used for?

Your lender will use a property valuation to determine the amount of equity you hold in your home.

If you're buying an investment and renting it out, you or your real estate agent will use the property valuation as a guide to setting the amount of the rent to be paid weekly.

Property valuations are also used by local councils and statutory bodies to calculate rates and taxes, such as:

  • Water and sewerage rates
  • Emergency services levy and tax
  • Local council rates
  • Stamp duty and capital gains tax

How Can I Maximise my Property Valuation?

The best way you can maximise your property valuation is to make a good impression with the property valuer.

The Certified Valuer will be looking at your property with a cool, professional eye. They will overlook some general 'lived-in' untidiness, but to ensure that you get the best result you should aim to present a clutter-free, cared for home.

A well-presented home indicates on-going maintenance and attention and ultimately adds to the perceived value of that property.

Here are some key areas of the house to pay attention to before the valuation day:

  1. House - general
  2. Apart from a general tidy up, including a dust and clean, remember to get the carpets cleaned, and touch up the paintwork - especially if you have children.

    If you have beautiful floor boards, but the rug you usually use is getting a bit worn, roll it up and display the floorboards on the valuation day.

    It's also a good idea to get any internal plasterboard fractures fixed up - these can sometimes occur when there's been renovations or extensions after the house was originally built, and changes in weather cause the house to shift. If you're concerned that there might be structural damage, get a building inspection to quantify it, rather then leaving the valuer to assess the risk. Knowing exactly what needs to be done puts a fixed value on any repairs.

    Take care of the little things, like making sure all the light bulbs are working, and there isn't dust or grime collected.

  3. Bathroom & Laundry
  4. The age and condition of the bathroom affect the value of the home. Check the tap fittings and replace an old shower screen. There's nothing worse than a dripping tap, a toilet that won't flush properly, or a drainage point that doesn't drain - any issues to do with plumbing can have domino effects on the rest of the property too, so they're taken seriously.

  5. Kitchen
  6. A working stove top, clean dishwasher, and cupboard doors that open and close as they should are a must. If you can't do the maintenance yourself, consider hiring a handyman to fix a few things up. It'll be worth it in the long run when you get your valuation back - $100 now could save you thousands in the valuation.

  7. Garden
  8. Overgrown plants and lawn are often just a sign that you're busy, but for the valuation, it's worth getting out into the garden with the pruner and the lawn mower.

    If there are any big items in the yard that don't belong try to get them disposed of before the valuation or the evaluator will include removal in the final figure.

If you can, provide the valuer with the building plans, and a list of any hard to see features. These might include an underground water tank, underfloor heating, or new solar panels.

You should also want to mention any improvements and renovations you've done since you bought the house.

On the actual valuation day, make sure you've tied up the dog, and the valuer has some peace and quiet to run through their assessment. Don't ask the valuer for a figure that day - they'll need to do more research before presenting a detailed report.

Will I need to arrange a property valuation myself?

A valuation is often conducted by your lender, if it is for the purpose of a mortgage settlement or refinancing a home loan. The lender is not obliged to tell you the outcome of the valuation.

If you do want to get a property valuation done for some other reason, you can arrange an independent valuation with one of our business partners, or speak to your Home Lending Specialist for a referral.

Your Home Lending Specialist will tell you if the bank will do a property valuation when you are taking out a home loan or refinancing a mortgage, and provide you with answers to any questions that you have about the process.

What do I do next?

If you are considering making a change by buying or selling a home or refinancing a property, our Home Lending Specialists can help you with advice and information free of charge. It's easy to get in touch to request a free property valuation report, or call 1300 366 287 and equip yourself to make wise decisions about your future.

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