Frequently Asked Questions

What is an independent property valuation?

An independent property valuation report is a certified document completed by an industry expert that determines the fair market value of any subject property. As such, an independent property valuation provides a comprehensive analysis of the property based on industry expertise, local knowledge, and objective data.

An independent property valuation can be conducted on all kinds of residential, commercial, and industrial property types. As such a property valuation can be used for a variety of purposes, including all matters of private use as well as meet the requirements for legal and legislative purposes.

What is included in a property valuation?

A property valuation includes an all-inclusive report on the subject property and the variables that influence its fair market value. As such, a property valuation will include extensive details of the subject property including land value, zoning restrictions, location, the condition of the property, and any fixtures and features.

In addition to this, a property valuation will also include an extensive market analysis while looking into local comparable sales, while also researching the property’s location, and any environmental risk factors. As such, a property valuation will include information regarding environmental risk factors, and proximity to local amenities, public transport, and business/shopping districts.

When is a property valuation required?

A property valuation is required for any kind of legal or legislative purpose in relation to the subject property and is highly recommended for a variety of purposes. As such, an independent property valuation is required to be submitted to governing bodies and taxation departments to ensure complete accuracy and transparency. In turn, a property valuation is compiled based on extensive research and objective data by a certified valuer and an expert in their local property market.

A certified property valuation is completed based on industry expertise and local knowledge and is conducted without any kind of conflict of interest. Because of this, a property valuation will create assurance when informing decisions regarding risks, asset distribution, and compliance for any kind of purpose.

What is the difference between a bank valuer and a property valuer?

A bank valuer is contracted by the lender to perform a valuation of the subject property to ensure loan security. As such, a bank valuer holds an underlying bias of wanting to minimise the risk should the loan be defaulted which tends to result in a conservative value.

On the other hand, a property valuer is duty bound by the Australian Property Institute (API) to perform a thorough investigation of the subject property to determine its fair market value. As such, a property valuer will complete extensive research to ensure fairness and objectivity without conflict of interest.

What is the difference between a real estate appraisal and a property valuation?

While a real estate appraisal and a property valuation both provide information on the value of the subject property, a real estate appraisal is not a certified report that determines the fair market value.

A real estate appraisal is conducted by a real estate agent and often hold the hidden agenda of wanting to have the property listed. As such, a real estate appraisal provides an estimation of value based on what the property is likely to be sold for.

A property valuation offers an all-encompassing, thoroughly researched document completed by a trained and certified valuer. As such, a property valuation can be used for a variety of purposes and is highly recommended for accurate pre-purchase/pre-sale advice for a well-informed report free from any kind of conflict of interest.

What valuation methods does a property valuer use?

In order to determine the fair market value of the subject property, the property valuer will use three main methodologies as outlined by the Australian Property Institute (API):

• The Direct Comparison Approach: the property valuer will compare and interpret over 200 variables between the property and local comparable properties in the surrounding areas.
• The Summation Approach: This methodology is exclusively used by API qualified property valuers and is used as an additional check to determine the replacement cost value by depreciating improvements against the underlying land value.
• Capitalisation of Net Income: This can be used as a supplement to the direct comparison and summation approaches as is utilised when valuing commercial properties. The property valuer will take the net rental income and capitalise this at a rate sourced by local comparable sales to determine the fair market value.

What are the benefits of a certified property valuer?

A certified property valuer can offer reliable advice concerning any given subject property through an independent valuation report without any kind of agenda or bias. As such, a certified property valuer is trained and registered by the Australian Property Institute (API) and is qualified to undergo extensive due diligence to adhere to any kind of legislative requirements.

Using a certified property valuer ensures complete accuracy, transparency, and professionalism no matter what the valuation requirements are. This is because a certified property valuer is a trained industry professional in valuing real property and is an expert in their local property market.

What are the qualifications of a certified property valuer?

In order to become a Certified Practicing Valuer (CPV), or a certified property valuer, one must undergo extensive education, training, and professional practice with the Australian Property Institute (API).

As such, a property valuer must complete tertiary education specialising in property, complete two years of industry practice via a traineeship, and sit a professional interview. It will take an average of six years to complete the necessary training to be qualified to complete certified valuation reports and to safely provide reliable advice regarding the property market.