Whenever you’re venturing into the property market – whether you’re buying your first home, or your fifth investment property – having an understanding of property value is crucial. And that means you really need an understanding of property valuations.

Property valuations help you to make informed decisions and avoid paying too much. They even give you stronger negotiating confidence. So let’s dive into everything you need to know about property valuations!

What is a property valuation?

A property valuation is simply a review of a property with the goal of assigning it a market value. They can be done for any type of property – and usually are completed prior to buying or selling a property.

Typically property valuations are done by property valuers. You can choose your own property valuer if you need a property valuation for any purpose. But if you’re working with a bank or other lender for financing, for example, they will likely send their own valuer to the property.

Why do property valuations matter?

1. Avoid overpaying for a property

The property market is highly competitive, and sometimes people can be driven by emotional decisions. That’s not always bad of course (homes are emotional!), but a property valuation can help you know when you’re making sound financial decisions and keep you from paying more for a property than what it’s worth.

2. Make informed negotiations

When you have a property valuation you can enter into property negotiations with a significant advantage. You’ll be able to confidently challenge inflated prices (as the buyer) and justify your own prices (as the seller). This makes the entire negotiation process more straightforward and much faster.

3. Make better investment decisions

As an investor a property valuation is vital because it allows you to understand your potential return on investment. You’ll also be in a better position to gauge whether the property is likely to appreciate in value or not, and where development opportunities might lie.

In essence a property valuation gives you foresight which is vital for investors (and really all property buyers!).

4. Secure financing

One of the most important benefits of a property valuation is to help you secure financing. All lenders will require a property valuation in order to provide you with a loan. And having a property valuation that is accurate means that you’ll get the financing you need to get the property you want!

5. Make smart improvements to the property

If you want to make any improvements to your property, it’s always a good idea to get a property valuation. This allows you to make additions or renovations without overcapitalising. And that means you won’t be stuck with a property that cost you more than it’s ultimately worth.

How is a property valuation done?

A property valuer will come to the property to inspect it personally. They will look at the home’s condition, but also confirm:

• the location of the property
• the types and amounts of amenities in the area
• the size of the land
• the size of the property
• the number of rooms
• the types and qualities of the fittings and fixtures
• the standard of the fit out
• the property’s architectural stye
• access to the property
• the aspect and layout of the block of land
• any structural faults
• anything else that could affect the market value

The valuer will gather all of this information, and then look at a handful of recent sales of comparable properties in your property’s location. This lets them get a ballpark figure, which they’ll adjust based on the unique conditions and differences of your property to the others.

Commercial properties may require a different approach, however. For example, the valuer may need to consider opportunities for development or the types of businesses that could use the space.

Once the property valuation is completed you’ll receive a property valuation report.

What’s in a property valuation report?

Your property valuation report is a comprehensive document that provides you with your estimated property value, but also sets out all the data that the valuer took into account to determine that property value. This will include the characteristics of the property, the comparable properties and the local market data.

It will be dated and will also give the name of the person who completed the valuation.

When do you need a property valuation?

Property valuations are often done in the following situations:

• When you’re planning for the sale or purchase of a property
• When you’re looking to get financing for a property purchase
• To properly execute a deceased estate which includes real property
• During property settlements for divorce or separation
• Sometimes for tax purposes

Getting a property valuation

There are many property valuers to choose from, and each will be able to provide you with an adequate property valuation. But we love to recommend Hello Haus, who doesn’t just offer property valuations, but also comprehensive property purchasing support.

In fact in addition to valuations, Hello Haus can help you confirm your buying criteria, including your location, budget, timeframe, property type, property age, capital growth potential, lifestyle needs and even desired features. They’ll conduct expert analysis on properties you’re considering to ensure that the price aligns with the market value.

They’ll also offer you access to the innovative Haus Finder – proprietary AI that will make your property search easier by sending weekly emails to your local real estate agents on your behalf. This is a great way to get off-market listings, and stay ahead of buyer competition.

Of course, Hello Haus experts can also do all the negotiation for you, so you get your property at the lowest price and on the best terms. Finally, once you’ve secured the property at the best price, they can give you support to select and liaise with your conveyancer, review your due diligence documents and provide advice on building and pest reports.

We're here to help

Wherever you are on your property journey – from pre-sale property valuations to financing – we’re here to help. We can find you the best home loans from more than 40 of Australia’s biggest banks and specialist lenders and we can also help you refinance your loan to help you keep more money in your pocket.

Give us a call today at Lending Loop.