You can get ready for a forthcoming property valuation by first understanding what it is and how it is carried out. We can better understand the process by examining what they are in detail.
A property valuation in Canberra is an assessment of a building and its surroundings. It is carried out by a licensed surveyor or valuer. Typically, they are members of the Australian Property Institute (API). This gives them certification status.
The main objective of it is to attest to a property’s worth. This is usually done by comparing the subject property to similar ones already on the market. There are countless reasons why you may need to have this assessment or inspection done. Making informed decisions regarding your home or business is one of them. Additionally, you'll be able to handle your finances better.
Now that we know what a property valuation is and why it is necessary, we will look at how it works.
The property valuation process
The property inspection and reporting process is fairly straightforward. While this is the case, it still requires precision and years of expertise. You will find a step-by-step description of the process below.
- Step 1: Get in touch with a licensed valuer in Canberra.
- Step 2: Make an appointment to have your home examined.
- Step 3: Prepare your property for the inspection.
- Step 4: When your valuer comes, they will take photographs, measurements, and notes on the condition of your home or building.
- Step 5: After they have gathered enough information, the research process will begin.
Cleaning on the inside and outside will give your valuer a good first impression. As the saying goes, a first impression is a lasting impression. Additionally, it will be easier for them to examine it without any distractions. Completing small building projects and repairing minor things before an inspection can also improve the outcome of the property assessment.
Once the valuer is done with their assessment, they will get more information on the real estate market and its trends. The information gathered about your property will be compared with data acquired from market research. From there on, the value of yours will be determined.
How long does a property valuation take?
The time it takes for a property to be assessed depends on its size. In other words, the bigger a building or a plot is, the longer it will take a valuer or surveyor to assess it. The type and purpose of the report will also affect how long the process will take.
The inspection of homes usually lasts for fifteen minutes to half an hour. Thereafter, the valuer will conduct research on similar properties and calculate the value of yours. You will receive an in-depth report within a few days.
What factors influence a house valuation?
Regardless of the sentimental value associated with a home, a valuation will only be based on its physical market value. House valuations are based on the following factors:
- Location of the home
- Age and condition
- Number of rooms, and bathrooms
- Kitchen space
- Built-in appliances and furniture
- Amount of floor space in the house
- Size of the building and plot it is built on
- Potential to renovate or expand the house
- Accessibility and its proximity to other amenities, like public transport, schools, supermarkets, etc.
The factors mentioned above are also influential in the valuation of other kinds of real estate. Commercial (business), multifamily/residential, and industrial property are a few examples of other kinds of real estate.
Property valuation for mortgaging
There is a direct relationship between your house’s value and your mortgage rate. This means that if one changes, so will the other. The likelihood that your loan amount will be approved increases with the value of your home, and vice versa.
Mortgages are also called home equity loans. If you are unable to pay back a loan, the bank or money lender will be able to claim your home as collateral.
Contrary to popular belief, a valuation report does not guarantee that your application for a mortgage will be approved. A building inspection for mortgages is done to benefit the mortgage lender. Along with your credit score, the findings of your property report will be taken into consideration. It will also serve as security for the loan you requested.
A mortgage lender will only perform a surface analysis of your assets' condition and will not go in-depth with the assessment. Making use of a professional and independent valuation service prior to your application for a mortgage will help you determine the actual value of your home. Furthermore, it can increase your chances of getting a mortgage.
What makes a property valuation valid?
The validity of a property valuation depends on who conducts it. It will be valid if it is carried out by the following individuals:
- Certified Practicing Valuers (CPVs)
- Bank Valuers
- Mortgage Valuers
While it is possible to perform your own home inspection or get a free home appraisal, it will be beneficial to have a CPV perform an accurate and impartial assessment of your property. Trained experts will give you a comprehensive report and a professional service.
How long is a property valuation valid for?
Depending on market conditions, the outcome of your property's assessment will remain valid for six to twelve months. It may be necessary to get an updated valuation due to other factors, such as inflation and market conditions changing significantly over a short period.
What happens after a property valuation?
Are you unsure of what to do after having your home or building assessed? Here’s a list of things you can do after receiving your property report documents:
- Set a sale price for your property.
- Take out a suitable insurance policy.
- Settle any legal disputes.
Who does the valuation get sent to?
Property valuations can be sent to a number of individuals or organisations for various purposes. These include the following:
- Mortgage brokers who will determine the outcome of your application for a mortgage.
- Moneylenders who need reassurance of collateral if you are unable to pay them back.
- Taxation officers who will prepare and draw up tax return reports for your Capital Gains Tax (CGT).
- Insurance brokers who will help you decide on a suitable insurance policy.
What have we learnt?
In a nutshell, valuations form a key part of owning real estate. Getting to know the process can help you prepare for it and will help you know what to expect after it has been completed.
These assessments are a quick and fairly straightforward process. Most real estate properties are valued based on many of the same factors. They can be conducted at any time and are valid for six months up to a year, depending on market conditions.
You can use your valuation report for many reasons other than buying or selling assets. These include taxation, mortgages and insurance. The value of your home will affect your mortgage rate and your ability to take out a loan.
A Certified Practicing Valuer (CPV) will give you an independent and accurate report that meets both national and international standards. A valuer who is a member of the Australian Property Institute (API) will give you one of the best services. Making use of a professional valuation service will ensure that you get a comprehensive report on the value of your assets in no time.
Reach out to us at Valuations ACT today to get a comprehensive valuation service from the best in the business.
