Valuing your home by a professional usually costs between $300-$500 and can be done for a number of reasons, the most prominent being to secure financing with a lender, dealing with a deceased estate, resolving a legal dispute, or just for general interest. Preparing for a property valuation is different to that done for an appraisal, as the latter is usually done by a real estate agent (often at no cost), and is a less systematic valuation.
Difference between a property valuation and an appraisal
Ever had a letter dropped in your letterbox from a local real estate agent offering a free appraisal? This is usually a free service offered by agents as both a branding exercise (getting there name out in the community) and building potential client lists. A property appraisal by an agent will consider the general attributes of your home (bedrooms, bathrooms), its general condition, location, obvious selling features and the local market sales history to give you a close estimate of the value of the home. An agent has strong knowledge of sales trends in your local area, so can often provide very realistic estimates for the value of your home. However, an agent has an incentive to create business through this practice, so there is the temptation for some agents to be overly-optimistic in your property appraisal results.
A property valuation is done by a qualified property valuer, who considers a larger range of factors in the process of calculating the value of your home. Their valuations are also accepted by lenders and in legal issues that require the value of a property, where as an appraisal are not.
A formal valuation will often include consideration of:
- The location of your home within the neighbourhood, within the greater metropolitan area, in relation to amenities, transport, parkland, schools etc.
- The aspect of your home and the use of natural light
- The condition of the home
- Unknown covenants that restrict future development (and value) of the land
- Features of a home
- The local market
With this information, a valuer will be able to not only provide you with an accurate value of your property but also highlight areas that you could address to increase its value, such as unseen council restrictions (this is done in a title search), or areas that could be used to negotiate the price down.
Preparing for a property valuation
There is some preparation you can do to ensure you get the highest possible and most accurate valuation for your home. This is never more important than when securing financing, so consider the following:
- Note down all unseen features of a home. These can include: solar panels, water management systems, environmentally sustainable construction features (double glazed windows, solar heating, recycled building materials).
- Provide all features of a home in print to a valuer, for their future reference when valuing your home over the next couple of weeks.
- Arrange for the valuation to be done at a time when the property attracts the most natural light or looks its best.
- Be present during the valuation, so alert tenants well in advance.
- Get 2-3 property appraisals from local agents, while looking online at property price estimates.