To make the right transactions in the property world, valuation is an essential part. If you’re naive to the real estate industry, then hiring a helping hand (a property valuer) is an appreciable idea. As assessing the property value is a tough task if you’re not trained, only professionals can do it with great accuracy and efficiency. Property valuation is daunting work, as you have to consider many factors that directly impact the property value. It is an art more than a calculative science. It includes all intangible & tangible aspects, including the neighborhood surrounding the property.
Here, we are revealing the techniques property valuers use to evaluate property value to prepare a property valuation report.
What Valuers Do
Sydney property valuers inspect the property, gather any previous data on it and find comparable property to evaluate the true value. The property valuation in Sydney takes anywhere from 2 or 3 days to a full week to produce the property valuation report, which holds complete details of the property.
The cost of hiring a professional property valuer varies. Fees will depend on the property type, size and the details in the property report required.
How Valuers Actually Work
To start, the full property must be inspected. This could take 2-3 hours, as it must take into account every detail of the property. As mentioned earlier, the valuer will collect the previous sales data of that area and recent sales value of nearby properties that are similar to get an accurate value.
If your valuer has comparable properties available, then he or she can use what’s called the ‘Sale Comparison Method (described below).’ If not, then the value of the property will be calculated manually. Finding comparable properties to evaluate residential real estate is fairly easy, but it becomes difficult when finding the value of commercial property.
Methods Used and How It Works
The sales comparison method needs comparables. It’s the main ingredient of this method. A comparable is a property with a similar type, size, location, and area to the property needing to be valued. It should have been sold in recent months as well. When viewing this section of the property valuation report, make sure the comparable properties are recently sold. Market conditions change, so if a property was sold years ago, it shouldn’t be included.
The valuer compares the comparable with the subject property and then evaluates the property value by making some analytical calculations to determine the property value.
The summation method can also be used. With this, the valuer calculates the value of the land and the house. He or she determines the cost of manufacturing a replica of the subject property. This takes into consideration size, shape, location, surrounding amenities and any renovations made on the property.
Some property valuers like Sydney property valuations use a combination of these two methods, and their experience and their valuation skills to find the right value of the property.
Property Valuation Report
After determining the property value, they prepare a report called a Property Valuation Report. This report contains a written description of the property, its value, and current pictures of the subject property. This report can be used, for example, when purchasing investment property to know if the selling price is a good one. It can also help in property disputes as government authorities consider the property valuation report by a registered valuer as authentic and reliable.