A property valuation provides an in-depth review of the value of a property. Sellers’ use property valuations to be able to understand how much the property will sell for and a buyer would obtain this as it reduces the overall risk of not understanding key market value and analysis of issues that may pose a weakness regarding the property and its features.
A registered property valuer certified by the Valuers Registration Board. Banks also have list of preferred valuers so get in touch with them before ordering your valuation.
A property valuation is an analysis and evaluation of the marketable value of a property. This will allow you to understand what the property is worth. It will be a valuable guide in establishing how much to offer on the specific property you are wanting to purchase.
The valuation takes into consideration information such as neighbouring properties sales information, the property market, council information, as well as land size, unique features, and conditions of the property itself. Once you have this in-depth analysis of the property, it will help you to be able to re-negotiate on price offered and in remedying any property concerns
They review all aspects of the house, including the outside of the property.
Rooms are measured and construction materials and types are confirmed. The overall condition of the house is inspected and rated. Items such as the flooring, unique features, ceilings, doors, lighting, ventilation, cladding, retaining walls and any points of concern for maintenance is commented on.
The report may also make note of the flooding and drainage and also provide some commentary on neighbouring properties, the street, ease of public transport and general comments about the local area noting all the positives and negatives.
The marketability based on their observations will be assessed and then provided in a written report.
Borrowing more than 80% of a properties value is deemed a higher risk for lenders. There are a lot of considerations apart from the initial application with who is the borrower and their income.
In a heated property market, it’s not uncommon to be competitive and pay top price. Markets can change, and in the event of having to sell the property, if the property market has dropped, the net proceeds from sale (sale price less real estate agent and marketing costs) may be higher than the original loan amount. This leaves the bank in a position of lending outstanding amounts that would be unsecured debt, or unable to be recuperated.
A registered valuation ensures the property is in line with market values, that the purchase price isn’t too high for the property’s type and location and notes the benefits as well as risks or hazards (if any) that may be a concern to the bank.
For first home buyers this additional requirement creates delays in getting a quick offer through and makes auctions difficult to purchase at, the valuation will be required upfront to confirm a maximum bidding price.
Registered Valuations should be requested through to correct process for the lender. Tella can organise for you on your behalf through 3rd parties such as Valocity or Corelogic at your cost.
All properties purchased are double checked by the lender to ensure the price purchase is within an expected price range, usually within 10%-15% of what properties in that area are selling for. When an existing home is purchased, the lender can do an electronic valuation or check the council valuation to ensure the purchase price is relevant and within that range. This valuation takes specifications from the property files online. If the property is too highly priced, a registered valuation may also be requested.
With a new build home there are no property files on record or council valuation issued yet to check and compare if the home is within the expected sale range for size/age/type. To support that the home will be worth what it has been purchased for, a registered valuation is required to show the value on completion. The bank will use this to lend money against.
At the end of a build, a completion certificate by the valuer will often also be required to confirm the home was built to the standard expected in the first valuation. This is not a new valuation. For the lender, this also shows they are lending against a completed building and a 3rd party has verified.
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