If you own real estate in Adelaide, you may be asked to provide a valuation report at some stage. Often this is when you first apply for a mortgage and the lender requests a valuation.
A valuation is an assessment that determines the value of a property’s market value. It is completed by a certified property valuer with the training and expertise to accurately calculate value.
What a valuation report can be used for
Property valuations are sworn reports which means that they are official and legally bound documents. As such, they can be used for a wide variety of purposes, including:
- Settling property
- Insuring a home
- Buying or selling property
- Seeking fair compensation
- And more
How you can get a valuation report
To get a property valuation report, your best option is to seek the services of a certified valuer. While you can get reports online, they should be approached with care. Some online services are reputable but as the reports are generated through automation, they may not be as useful as a sworn valuation report. When hiring a property valuer look out for the following qualities:
- Certified by the API
- Local to the area
- Specialised experience
- Good reviews
How property valuations are completed
First, a valuer needs to know what the purpose of the report is as this will determine the type of valuation that can be completed, its method and the final format of the report. Here is a simple breakdown of what is involved in the valuation process:
Inspection
Valuations can be conducted with or without an inspection. Desktop inspections are completed online using the available data within professional databases. There are 3 types of inspections:
- Full inspection – a meticulous inspection of the interiors and exterior of a property.
- Kerbside – a visit to the property where the valuer makes their observations from outside.
- Virtual – a recent variation where the valuer inspects the property via a video call. Very limited in its use.
Method
There are a great variety of valuation methods that can result in different details and values reported by the valuer. For most standard scenarios, such as buying, selling, and even insuring property, the following methods may be used:
- Direct sales comparison approach – using the sales of local comparable properties to calculate value.
- Cost summation method – the sum of all that adds value to the property including the factors that lead to depreciation.
- Income approach – a capitalisation method using the net operating income of the property to determine value.
Research & Analysis
A crucial part of the valuation process is the in-depth research that is completed by the valuer and their expert analysis. There is a lot to consider and to be included in a report, which includes market trends, on-site risks, historical data, council zoning and restrictions.
Professionals use several resources to ensure accuracy. They then use their developed skills to analyse their findings and consider how it affects the value of a property.
Calculation
The formulas used to calculate value will vary according to the method being used and the value to be calculated. If a valuer were to calculate the current market value of a standard residential property for pre-purchase advice, then they will use the average cost per square metre of comparable properties to determine value.
Report
Reports are to be made to the standards that were developed by the International Valuation Standards Council. It is then fine-tuned to serve its intended purpose.
For transparency, all of a valuer’s findings are included in their report. The methods, data and all other relevant information can be found in the final report.
How long does it take to complete a valuation?
When it comes to how long you have to wait for a valuation report from the time you have ordered it will have to depend on the situation, the property, and the valuer. A house valuation can typically be a few business days following an inspection, whereas a commercial report may be available 3 to 5 days after a valuer’s visit to the property.
Inspections are shorter than you may think. A home can be inspected by a valuer in 15-30 mins; however, large estates may take up to 2 hours to complete the full inspection.
The cost of a property valuation report
A property valuation is not a free service. It can be quite expensive as you are hiring a university-educated professional to complete a comprehensive process. Much like the method and the timing of the report, the cost is determined by the property and the purpose of the report.
To find out how much you will have to pay for a report, you will have to request a quote from a property valuer service. Note, that the cost will be determined by such things as the property type, location, estimated value, and the resources required or the complexity of the valuation.
Contact your local valuer today to learn more about property valuations and how your property would be valued for your exact purpose.