Real Estate Valuation Tools: How To Get An Accurate Property Valuation
The property market is complex and subject to constant change, making it difficult for some to know the value of the real estate at any given time.
A property seller’s asking price is often vastly different from its actual market worth, and the prospective buyer may be none the wiser. The power of understanding property valuation and knowing what tools are available to you should not be underestimated.
A real estate valuation tool refers to a mechanism used to determine the value of a property.
Not all real estate valuation tools have the same level of accuracy and/or legitimacy, and some might not be worth your time if it’s not suited to your purpose. The quality of the assessment is dependent on the property valuation tool you choose.
Finding a suitable valuation service in Adelaide can be overwhelming if you’re not sure what it is you’re looking for.
Property valuation services
The value of a property is influenced by a variety of internal and external factors such as location, market conditions, size, condition, interest rates and more. A valuation service will consider all these factors when determining the property’s worth.
The most commonly used real estate valuation tools are as follows:
Independent Property Valuation
The most accurate and sought-after form of assessing a property’s worth. An independent property valuation is performed by a registered and independent body that has no inherent bias or related interest in the outcome of the report.
The process involves a Certified Practising Valuer (CPV) who is registered with the Australian Property Institute (API) performing a comprehensive and detailed inspection of the subject property. The expert uses a combination of different methodologies and considers all of the relevant factors to reach a reliable and precise final worth.
A certified report is prepared in accordance with rigid regulatory and legislative requirements. It serves as an official and reliable document in legal and private proceedings.
Real Estate Appraisals
A real estate appraisal is usually performed by a realtor with an inherent bias and direct interest in the outcome of the valuation.
As this kind of valuation is not performed by an independent body, they do not serve as a certified and conclusive calculation of the worth. As such, a real estate appraisal cannot be used as an official document in legal or private transactions.
Real estate appraisals are often performed as a free service by the agent overseeing the process of selling the house, but this is not entirely reliable and will differ from agent to agent.
An agent will recommend a listing price based on what they believe is fair in the current market. The fact that the realtor stands to gain something from the sale of the property means it should be approached with caution.
Realtors are, however, fairly well-versed in all to do with property and could prove as a beneficial real estate valuation calculator when you’re considering a few different properties.
Online Property Valuation
At some point, you have probably wondered how to check a property valuation online. Such a service can be a useful guide for both buyers and sellers of property at the beginning of the process. It should not be seen as an accurate or final calculation of a property’s worth, but it does serve a purpose.
They serve as a cheap, accessible, and/or free way of estimating a property’s value. It can be useful for buyers who are considering several properties as well as sellers who are still uncertain about whether it would fetch a high enough price.
An online valuation should never be relied on alone, and it’s highly recommended that anyone considering a property transaction buy a registered valuation from an independent firm. Think of online valuations as a property valuation estimate, rather than a definitive calculation.
Types of Property Valuations
Some property valuations are more complex than others, depending on the property type and the scale of the report. The most commonly requested types of property valuation services are:
Residential Valuations
A reliable method of finding out the value of your home according to the existing market conditions.
This is often a short-form report that often, but not always, includes an inspection of the property as well as external factors like comparable sales and interest rates.
Commercial Property Valuations
Commercial property valuations are more complex than regular residential valuations as qualified valuers have to consider additional factors such as the income, expenses, and liabilities of the property.
These valuations may involve an analysis of commercial assets or an internal accounting valuation to determine the financial position of the commercial property.
Plant & Machinery Valuations
Plant and machinery valuations should only be performed by Certified Practising Valuers (CPV) of Plant and Machinery (P&M).
The report may be for single or multiple assets, or any of the machines contributing to day-to-day functionality. It may also be a comprehensive assessment of the plant and equipment as a whole.
Industrial Valuations
A detailed valuation report for properties within the manufacturing and industrial sector. Organisations such as factories, workshops, warehouses, distribution centres, breweries, industrial land, and more.
The qualified valuer must be well-versed in the industrial sectors within the area and have a thorough understanding of the relevant market conditions.
In Conclusion
At the end of the day, the most important part of a property valuation is the precision of the report. An unreliable valuation tool will lead to an uninformed financial decision.
The most reliable way of calculating a property’s worth is by purchasing a valuation from a registered firm. Its members must have the necessary qualifications to ensure a high level of accuracy.
While real estate appraisals and online valuation tools may prove a useful guide, they should never be seen as a replacement for an official valuation report.
The report depends on the type of property being inspected. A firm will assign a qualified valuer with experience in the relevant sector. Valuations can be for residential, commercial and industrial properties in addition to plant and equipment valuations.
For more information on our property valuation services, speak to one of our qualified experts today.