Most homebuyers believe that property valuation is yet another unnecessary expense. But that is not true. In fact, property valuation benefits both the buyer and the seller. It helps you assess the real value of the house in the current market conditions.
What is meant by property valuation?
The property valuation is usually conducted by a certified professional on request by the homebuyer or the lending institution.
The property valuation report includes all relevant information about the property, including the size of the plot and building, the condition of the house and any problems that need to be addressed. The report also includes information on recent comparable home sales in the neighborhood.
When should I get a property valuation done?
If your purchase of the property is financed by a bank, you will definitely have to get the property valued. It is one of the essential parts of a home loan application process.
The bank wants to ensure that the value of the house covers the loan. This is necessary to protect their interests if you fail to pay the mortgage.
Most banks have their own panel for conducting property valuation. You may also need a valuation before making an offer.
How does the officer value your property?
A property valuator will visit the property, take its measurements and note details about the structure of the building and its general condition. They will also note any structural faults. Other details given in a valuation report are the layout of rooms, fittings and fixtures. And if the valuator feels that some improvements are necessary, they will also note it down.
If the property has any garages or outbuildings, they, too, will be mentioned in the valuation report. The valuation report may include some photos of the house.
The valuer also considers council zoning and planning restrictions. They then compare all of these attributes to comparable home sales in the neighborhood. This helps them come up with the figure.
Is there a difference between appraisals given by real estate agents and licensed valuers?
Real estate agents know the value of comparable home sales in the locality. In a bid to win your listing, they might give an appraisal of your property. Their valuation is based on their experience and comparable home sales in the locality. Note that this cannot be the official valuation. Real estate agents want you to sell the property for the best possible price because their commission is a percentage of the sales price. A licensed valuer, on the other hand, has no personal interests in the sale. Their valuation is based on facts.
The sale may fall through if after the property valuation it is discovered that the value of the property is lower than the agreed sales price. In this case, the buyer can exit the contract.
What should I do to increase the value of my property?
If you are planning to sell your home, you will definitely want to increase its value. Here are a few things you can do:
- A renovation often increases the value of the property. You can also consider increasing the floor space of the house. You could perhaps add a bathroom or a bedroom.
- Tidy up your outdoor living space. If there are untidy structures in the backyard, get them removed. Also think about ways to improve vehicle access.
- Apply a fresh coat of paint. It does wonders. Also give your kitchen and bathrooms and mini makeover. While selling the property you can usually recover the cost of cabinetry and other fixtures.
- If you do not have a covered area for vehicles, you should consider adding a garage. Also ensure that your house looks neat and tidy.
You can’t change the location of the property, so forget about it. But you can make several changes to the property.