What is a Property Valuation?

A property valuation is often conducted by a qualified and certified valuer on the request of a lender/credit provider who is looking to fund the purchase of a property. The valuation can also be requested by you (if required).

Why do Lenders require a Property Valuation?

It is an essential part of the home loan application process and is usually performed by when lenders are in the process of financing a property. The lender/credit provider will usually use their own nominated panel or preferred licensed property valuers.

Property valuation is requested for number of reasons, such as:

To assist in the calculation of the Loan-to-Value Ratio (LVR)

Develop an opinion of the market value of the property

Assess the value of land, buildings, improvements and other factors that influence the current and past value of your property (i.e. the process involves both external and internal inspection of the property)

What Information is available in Property Valuation Reports?

Property valuation reports will include the following relevant property information details:

Executive Summary – which is a summary of the report itself showing who ordered the report and who the owner of the property is to be

Land Details – such as dimensions and area

Title Particulars – shows the Title volume and folio numbers and any other encumbrances registered on Title

Topography – a description of the land and the area

Services – what infrastructure is available e.g. water, electricity, sewerage

Town Planning – the Zoning of the property and if the buildings conform to that zoning

Planning Constraints – whether the property has any Council planning constraints

Environmental – if any environmental issues are in evidence

Location – describes where the property is in relation to CBD’s and other suburbs

Improvements, which include:

Dwelling Description – a brief statement of the dwelling

Construction – describes the materials used e.g. brick and tile

Accommodation – the number of rooms and the type of rooms within the building

PC Items – covers the kitchen, bathrooms, laundry

Fixtures& Features –describes such items as the air conditioning, ceiling fans and floor type, etc.

Other Improvements – will show a swimming pool (if installed), and fencing

Building Areas – shown in square meters the living, outdoor and garage areas

Condition

Photographs of Improvements – photos of the building in and outside

Comparable Sales – shows the recent sale of other properties in the same area

Sales Evidence – lists the address, sale price and date of sale

Risk Analysis – shows the property risk and marker risk ratings on a scale of 1-5 with 1= low risk and 5=high risk

Comments – Valuers overall assessment of the property

Valuation Approach

Remember that several factors constitute the property valuation report. If you keep in mind the factors mentioned in this guidebook, it will enable you in choosing the right property.

Are you considering buying a property? If you are looking for finance, the Team at Finance Me will help you in your Home Loan journey. Enquire online now.