Sometimes, you may wonder how much your home is worth. If you’ve owned your house for a long time or just want to know its worth, a property valuation can help you do that. For starters, you’ll want to contact a professional firm like Melbourne Property Valuers Metro. Such a firm can help you with such matters. This guide is to explain what property valuation is and how it works. It’ll also show why they’re needed.
What is Property Valuation?
This is the process of determining the current marketplace value of a property. Basically, property valuation comes up with a figure for which a property would sell if it were to be put on the market at a particular time. Of course, coming up with a figure as a result of property valuation does not imply that the property will sell for that specific amount. Many properties tend to be sold for a value less or more than the figure calculated by the process of property valuation.
There are several factors for this situation. These include:
i) Housing market conditions at a specific time
ii)General house sale trends in a specific area
iii) The property structure, layout, and topography
iv) Zoning laws and special property taxes
v) Heritage conditions
vi) Land size and block
vii) The property’s physical condition and curb appeal
viii) Property’s location, i.e., how far is it from the city center, and how accessible it is by road
ix) Number and type of rooms within the property, special amenities, fixtures, or fittings in it.
When Are Property Valuations Needed?
It’s rare that a property owner will request property valuation out of the blue. Usually, there is a reason for it. These reasons may include:
I) When you’re selling the property and are unsure of its current value, given market forces and other housing factors. Usually, your potential buyer’s lender will need these figures to be sure of how much loan to offer. This is because lenders like banks don’t tend to trust property valuation figures from uncertified entities. As the seller, you’ll also need reliable property valuation to enable you to set a reasonable asking price.
ii) For legal purposes. Perhaps the property has recently come under new ownership, possibly due to inheritance from a deceased one, or there is some kind of legal dispute. A property valuation provides reliable figures that can stand up to scrutiny in a courtroom.
iii) For refinancing purposes. If you’re a property owner and you’d like a loan, your lender will want an independent assessment of your property’s value to ascertain its equity.
The usefulness of the property valuation process extends beyond legal reasons. For instance, this process can provide crucial information regarding the state of a property. For instance, after a property valuation, a homeowner may discover that the land on which their house sits is gradually developing subterranean weakness. Such information can enable the property owner to take the necessary action to remedy this situation. This is in addition to giving such a homeowner a starting point for setting the price of the property if they choose to sell it.
For a buyer, property valuation is equally useful. As a buyer, you want to ensure that you’re not paying over the odds for a property. Also, reliable valuation figures give you a good idea of how much a lender will allow you to borrow for the property.
Who Do Property Valuations?
Property valuations are performed by certified and licensed property valuers. These individuals can work independently or for an institution like a bank. If you’re considering hiring an independent property valuer, ensure that they are certified by a recognized authority. For example, Metro Property Valuers Metro is certified by the Australian Property Institute, meaning they are reliable.
Cost of Property Valuations
Depending on where you live and other factors like the size of your property, you can pay anywhere between $300 and $600 for property valuation. If your lender, like a bank, requires property valuation as part of refinancing your home loan, they’ll provide this service for you. Of course, they’ll recoup this cost by adding it to your interest rate.
A typical property valuation process takes about a week. This includes a day or two for a full physical inspection and a few more days to create a comprehensive valuation report that is binding.
All in all, property valuation helps ensure that many processes and issues surrounding the sale, purchase, or ownership of a property are smoothly resolved. Whether it’s a lending institution like a bank or a private individual, a property valuation can help set everyone’s mind at ease.