What is a valuation?
Property valuation is how Certified Practising Valuers (CPVs) determine the market value of any property. It’s a precise and lengthy process that CPVs are ready to complete at blistering turnaround times.
This service may be necessary when:
- entering the pre-sale or pre-purchase process
- shifting the ownership of any land or property
- undergoing property-related legal disputes
- or calculating your tax obligations
The process involves a hefty amount of market research and analysis. Luckily, valuers have access to prime property databases that allow them to make informed decisions.
Most property valuation reports are completed by:
- comparing your property to recent local sales data using over 200 variables
- calculating the value of both the property and improvements made to it
- and determining income generated as a sign of total value
Finally, these services can be divided into:
- desktop valuations
- kerbside valuations
- full-service valuations
Each one covers similar bases but has unique components built to fit a number of situations. Desktop and kerbside appraisals are unique in that they don’t cover the entire spectrum of methods we normally associate with the valuation process.
Generally, a completed report will take anywhere from 3 – 5 days. This may be extended for more complex assets such as industrial or commercial property. Nevertheless, the methodologies remain largely unchanged.
Who’s qualified to perform a valuation?
You’ll find property appraisals done by banks and real estate agents alike. However, only a CPV possesses the right combination of training, property knowledge and financial savvy.
Beyond that, bank appraisals are generally seen as conservative estimates. Real estate appraisals, on the other hand, are based solely on what they believe a property could sell for. Neither are impartial or recognised for the same number of legal or administrative purposes as an independent service.
CPVs are:
- registered members of the Australian Property Institute (API)
- bound by strict standards for quality and objectivity
- capable of valuing properties at current or retrospective value
The API provides continuous training opportunities that your CPVs and you ultimately benefit from. Any investor knows just how volatile the property market can be. This training allows them to prepare for that.
A CPV can deliver top-class service no matter the state of the market. They’re held to superior standards for impartiality, which makes them your go-to for all your legal property valuation needs. CPVs can even develop reports for taxation purposes such as your stamp duty or capital gains tax.
What is a desktop valuation?
As opposed to a full-service property valuation, a desktop report is conducted entirely remotely. There is no physical inspection of either the exterior or interior. This naturally applies best in the case of a pending development.
This approach relies heavily on market data, available plans and collaboration with both developers and real estate agents.
Desktop reports are considered the fastest, most convenient way to get a report of your property’s value. Though you’re lacking some key information, your valuer can still make the necessary market comparisons.
To that point, desktop valuation is only thought to be a valid option for particularly low-risk investments.
Unfortunately, there are various legal purposes for which a desktop valuation might not be enough. As there is no physical inspection attached, they cannot be considered quite as accurate as a full service or even kerbside valuation.
What is a kerbside valuation?
Kerbside valuation adds one key component to the desktop service: an exterior inspection. While this still lacks the comprehensive picture of a full-service valuation, it nevertheless contributes to a far greater understanding of any property’s value.
This adds a lot of critical detail to your valuation report. If a full-service property valuation is out of the question, this would be your next best option.
All in all, kerbside appraisal is considered most appropriate for low to medium-risk investments. If you’re unsure which type of valuation is best for you, a qualified valuer can help to set you on the right path.
Desktop vs kerbside property valuation
Desktop and kerbside services have more in common than you might think.
Desktop and kerbside valuations are both:
- cheaper
- faster
- more efficient
- not 100% reliable compared to the full-service options
On the other hand, kerbside valuations are more comprehensive, while still enjoying similar benefits when compared to a full-service valuation. They also fill in many of the gaps that a desktop service can create.
Both styles of valuation will focus on:
- the current and future value of your property’s surroundings
- applicable zoning restrictions
- in-depth analysis of the property market
This goes to show that both approaches are built on the same methodology, whether it’s a residential or business valuation. These methods have been refined for decades under the guidance of the API. Though neither method is entirely all-inclusive, you are sure to get your money’s worth either way.
Summary of desktop vs kerbside valuation
The type of valuation service you go for really depends on your situation and your unique needs. If your property’s still being built, go for a desktop valuation. If the interior is under renovation or you have busy tenants, opt for a kerbside valuation.
Both styles have their ups and downs, and neither is a blanket service for all situations. They are considered to be far quicker and more efficient than the full-service option, however.
Either way, you want to ensure you’re working with a Certified Practising Valuer. They are uniquely qualified to determine which service is most appropriate and develop a valuation report that fits all of your needs.
To talk about the desktop or kerbside options (and to receive a free quote on your valuation) get in touch with one of our qualified CPVs today.
