Anyone with a vested interest in a property can stand to benefit from an independent valuation. The purpose of a valuation is to attach a clear and definitive monetary worth to the property. This means determining the true market value.
A property valuation in Tasmania is by far the most reliable method of calculating a property’s worth. A report is prepared by a Certified Practising Valuer (CPV); a professional who is qualified and trained in the art of assessing all types of real estate.
Such professionals are registered with the Australian Property Institute (API) and adhere to international valuation standards. Every task is approached with fundamental principles of honesty, integrity, and transparency.
What makes a property valuation valid is the fact that it’s prepared by experienced and qualified specialists.
Valuers have to meet every regulatory and legislative requirement to ensure the reports are accepted as official. Each report is custom-made to suit the purposes of the client.
What is the property valuation process?
The property valuation steps that a valuer follows are usually dependent on the purpose of the report and the type of real estate being assessed.
A commercial report is prepared in a different manner than a residential one. Valuers choose a primary method of calculation that suits the property and may use secondary methods to refine the final figure.
What is a house valuation based on?
Valuers mostly follow the direct comparison approach when assessing residential real estate. This means that they consider the sales of comparable properties in the area to get a foundational value.
They then make the necessary adjustments in accordance with the features of the building. The following key factors are considered during the inspection of the home:
- Location
- Size
- Space
- Street appeal
- Notable features
- Market conditions
What is a commercial property valuation based on?
A commercial property report involves a consideration of income. As such, valuers follow the income capitalisation approach when determining its value.
This method takes the net operating income of the property and divides it by the capitalisation rate to help determine true market value. The following factors are also considered in the report:
- Parking availability
- Location
- Surrounding stores and infrastructure
- Zoning laws
- Market conditions
How does a home valuation affect a mortgage?
A valuation has a direct impact on home loan applications as it guides the lender on the amount they’re willing to loan. A mortgage valuation is usually organised by the bank or financial lender, but there may be cases where an independent valuation serves as enough proof of value.
In those cases, it is far better to purchase a home valuation than to rely on the expertise of the bank as their assessment will likely be a conservative one that favours their interests.
A bank needs to know the value of the property to determine the loan-to-value (LTV) ratio. A valuation for mortgage purposes is used to figure out if the subject property provides enough security for the loan package being applied for.
What are the benefits of property valuations?
Understanding your property’s worth can be beneficial for several different reasons and a property valuation is your best bet at getting an accurate assessment.
Some of the main reasons people get property valuation are:
- Guidance prior to a sale or purchase: The reports give parties a clear outline of the true market value and therefore allow for a well-informed decision to be made regarding a sale or purchase.
- Assistance with insurance: For insurance purposes, these certified reports are needed to determine the extent of the package needed. An independent valuation will help ensure the appropriate amount of coverage is purchased.
- Improved strategic planning: A thorough analysis of your home or business ultimately allows for improved future planning as owners can make informed decisions regarding the property.
- Assistance with a legal dispute: A valuation can be extremely beneficial in legal disputes involving a subject property as parties do not need to waste time debating the property’s worth.
In conclusion
An independent property valuation is a reliable and accepted method of determining the true market value of a property.
Certified Practising Valuers who are registered with the Australian Property Institute (API) apply their specialised insight and years of experience to prepare accurate reports. Each valuation is in accordance with international standards.
Valuers use a combination of trusted methods and consider several internal and external factors when preparing reports. The primary method chosen is dependent on the type of property and purpose of the report.
There are plenty of benefits to getting a property valuation. Whether you need guidance on a sale/purchase or assistance with paying your tax, the service can be useful.
For more information on how property valuations work, don’t hesitate to reach out. Our experts are more than happy to assist.
