Questions on Valuation Services
Frequently Asked Questions
The cost of a property valuation will depend on one, two or more factors that may include:
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The time required for a property valuation consists of two parts: the first part being the time for the physical inspection; and the second part being the time for the valuer to prepare and complete the valuation report.
The physical inspection can take as fast as 10 minutes for a small apartment unit or 45 minutes for a large building or even longer if there are unusual features or issues that require further investigation.
The preparation and completion of the valuation report typically involves several tasks that include:
- 1Broad research of property sales within the vicinity (geographical proximity) and within the last three to six months (sale date proximity).
- 2Analysing each of the property sales from (1) above and selecting usually four to five of the most comparable sales to be used as benchmarks of value for the property being valued.
- 3Carry out at least a kerbside inspection of the selected comparable sales above.
- 4Write up (or type) the report in accordance with the standards and professional practice of the Australian Property Institute, the peak professional body for valuers. (Read “What is in a Valuation Report?”)
- 5Review of the valuation report before release as a check for any errors or inaccuracies.
The time required to complete the above tasks could take from one to three days (for urgent jobs) or comfortably five working days typically. Depending on the terms of reference, property type (for example, residential or commercial), its location, physical size, single or multiple use, number of tenancies and other variables, a property valuation could take 10 to 15 working days or even longer to complete.
You are paying good money for a valuation of your property, so it is wise to give the valuer sufficient time and not pressure or rush the valuer to complete the job for an accurate and robust valuation report.
An online computer-generated valuation uses an Automated Valuation Model (AVM) which is an algorithm and database driven method of valuation using statistical analysis. Anyone can order a so-called valuation from the several AVM service providers in Australia for a relatively small fee (sometimes as low as $19.95). Some online home value calculators are even free to use on a limited basis.
The main benefits of these computer-generated valuations are their speed and convenience. Other than using it for properties that have a good set of recent sales evidence (such as in new housing developments) and even then with caution, there are many risks in using these so-called valuations.
For more information >> Seven Reasons Why an AVM CANNOT Replace a Human Valuer?
A Kerbside Valuation a.k.a. a ‘drive by valuation’ is a valuation undertaken without the benefit of an internal inspection of the property. The valuer only looks at the property from the kerbside and with information from zoning maps, aerial images, local council, sales and other databases a range of values is accessed. A Kerbside Valuation is much less accurate than a full valuation.
A Desktop Valuation or called a Desktop Assessment by the Australian Property Institute is a valuation carried out without the benefit of an internal inspection or even a kerbside (“drive by”) inspection. The valuer relies on specified documents and information to produce an Indicative Assessment (with conditions) of value of the Subject Property. A Desktop Valuation could be less accurate than a kerbside valuation, given that the valuer had not viewed the property even from the kerbside.
This question is often asked by people who want to get a professional opinion from a valuer before buying or selling a property but do not want to pay the full fee for a full valuation report.
The preparation of the so-called “fancy” valuation report is not the most time-consuming part of the whole valuation process. It is the research and analysis of sales evidence and the state of the market that takes up the most time and legwork. However, if a client is happy to do away with the report and just get a professional opinion of value, in such cases, a discount of 20% to 30% can be considered.
As part of the valuation process a valuer will walk through the property taking notes, some measurements and photographs of the rooms and spaces within the property. Finishes, fittings, the general condition, visible defects and type of building materials are all noted and/or photographed. Outdoor improvements including any porch, verandah, patio, car accommodation and other out-buildings are also to be noted and/or photographed.
The general condition and accommodation of a property is the main focus of a valuer’s inspection. The valuer is not expected to inspect areas that are not visible (example, spaces between walls and above the ceiling) or on the roof or under the floor. Neither is the valuer expected to inspect any plumbing, electrical or structural issues other than obvious faults or defects.
A building inspection on the other hand looks at all areas of the property, including the interior and exterior of the building; structural and non-structural elements; water penetration issues; trees or vegetation that may be dangerous or may cause foundation problems.
Among the items checked by a building inspector are:
The matters considered by a valuer will vary according to the type of property (industrial, retail, commercial, special purpose, etc) being valued and the purpose of the valuation. They could include some, most or all of the following headings:
Yes, you can.
The main ones are the Australian Property Institute (API), Australian Valuers Institute (AVI) and Royal Institute of Chartered Surveyors (RICS).
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