Frequently Asked Questions

What is a certified property valuation report?

A certified property valuation report is a legal document that determines the fair market value of any subject property for a variety of purposes. A property valuation can be completed on all property types and will provide information regarding a variety of variables that contribute to the overall value.

A certified property valuation represents the accurate value and is completed by a trained industry professional in valuing real property. As such, a property valuation is certified to be used in a variety of settings, including private matters and formal settings such as court proceedings and government submissions.

Real Estate Appraisals vs. property valuations

A real estate appraisal provides an estimation of value of the subject property based on market performance and cannot be used for legislative purpose. As such, a real estate appraisal is based on what the property is believed can be sold for and holds the bias from the agent to want to list the property for sale.

A property valuation is a legally certified document that provides the fair market value of the subject property based on objective data and extensive research. A property valuation offers an independently determined value without any kind of conflict of interest and is completed by a qualified valuer.

Long form vs. short form property valuations

There are two formats of reports you can obtain depending on your valuation requirements and property type:

• Short form: a short property valuation report will include a comprehensive insight on the property and include detailing’s of the property such environmental factors, market volatility, and location. It will also include a market analysis of local comparable sales. A short form property valuation cannot be used for legal and litigation proceedings.
• Long form: a long form property valuation report is used for valuing commercial properties and properties involved in family law and litigation proceedings. As such, a long form property valuation will adhere to any kind of court-imposed requirements and include an extensive market analysis and a heavily detailed account of the subject property.

How does a property valuer calculate fair market value?

An independent property valuer will utilise three main methodologies in order to determine a subject property’s fair market value:

• Direct Comparison Approach: this approach will compare the subject property to other similar properties in the local market. As such, the property valuer will analyse over 200 variables to determine value.
• The Summation Approach: This is used as a secondary check and is exclusively used by API certified property valuer. It will analyse the replacement cost value of improvements, depreciate this value by age, and measure this against the land value of the property.
• Capitalisation of Net Income: this is reserved for valuing commercial properties and will use the net rental income of the subject property, and capitalise this at a rate of return taken from comparable sales.

Why do you need an independent property valuation?

An independent property valuation report is required for any kind of legislative reasons, government compliance, and legal proceedings involving the subject property. A property valuation is also highly recommended in all private matters to seek an accurate and trusted value of the subject property.

As such, a property valuation is also needed for any kind of specialised and complex matter that require a qualified expert. As such, a property valuation therefore offers an independent, unbiased analysis on the subject property through extensive due diligence to ensure it is eligible for legislative requirements.

What does a property valuer include in a valuation report?

To ensure an accurate market value of the subject property, a property valuer is duty bound to include all evidence and information to include a comprehensive analysis based on objective data. This will include a detailed risk analysis, any notable improvements made to the property, and local comparable sales in the local market.

The property valuer will also include information involving factors such as the property location and access to local amenities and proximity to public transport and schools. As such, a certified property valuer will provide a certified valuation report based on local knowledge and extensive research.

What is the difference between a bank valuer and a property valuer?

A bank valuer is employed by the lender to determine the value of the property for the purpose of loan security. As such, a bank valuer will seek to determine the value of the property with the underlying bias of wanting to minimise the lenders risk. As such, this will lead to a conservative determination of value.

A property valuer is exclusively trained and qualified to perform valuation services on real property and is an expert in their local property market. As such, a property valuer will determine the value of the property based on extensive research with the sole objective to provide the fair market value without bias.

What are the benefits of a certified property valuer?

A certified property valuer can provide a sworn valuation report that is eligible for acceptance for legal purposes and governing bodies. This makes them legally qualified to complete valuations that adhere to specific guidelines while remaining independent and free from bias.

Using a certified property valuer will ensure an accurate market value of any property type and is vital for creating certainty, minimising risk, and informing decisions relating to the subject property.