How much do you really know about your home’s value? You can look at what neighbouring properties are selling for as a guide, but the only way to get a true indication is to have your home evaluated by a qualified property valuer.
It’s no secret that there are certain qualities that add value to your home, says property and finance expert Peter Boehm, co-founder of Top Choice Home Loans – just as there are other features that can drag your property’s value down.
When you engage a valuer to review your property, it’s their job to estimate a price that could be realistically achieved if the property had to be sold within 90 days, given reasonable marketing and an arms-length transaction between a willing buyer and a willing seller.
Valuations and price estimates are two different things, Boehm cautions, and it's important to understand that a real estate agent's price estimate is not the same as a professional valuation.
“A price estimate merely acts as a guide to assist in the marketing and selling of the property – it is not a proper valuation and has no formal standing,” he explains.
“It's not recognised by the courts or by lenders when assessing a home loan application, as a recognised property valuation can only be carried out by a fully licensed valuer.”
According to Boehm, some of the key attributes that a valuer will look for include:
- Architectural style
- Aspect, topography and layout of the block
- Land size
- Location in relation to schools, public transport, shops and amenities
- Number of rooms including bedrooms, bathrooms and the size of the kitchen
- Renovation and/or development potential
- Size and layout of the residence
“Valuations are professional opinions based as much on art as on science,” Boehm notes, “because they take into consideration both tangible and intangible aspects of a property, including its surrounds.”
One thing is for certain, though: valuers look for certain attributes that can add or reduce a property's value, so it's useful to know what they’re looking for in advance.
According to Boehm, positive qualities can include:
- Aspect, particularly water views
- Close proximity to lifestyle amenities
- Good development potential
- Large land component
- Multiple bathrooms
- Modern, well-appointed kitchen
- Modern or renovated bathroom/s
- Sought-after architectural style
Negative qualities can include:
- Environmental risks such as overhead power lines
- Low access to public transport, shops and other amenities
- Poor building condition
- Poor room layout and design
- Proximity to main road traffic
- Mixed use zoning (residential/commercial)
- Small land component
A comprehensive valuation includes a thorough internal and external inspection of the property, and will normally takes around two days to be produced. A standard three-page valuation report will vary in price depending on the property’s location and type, but Boehm estimates that a valuation on an average-sized property will set you back around $300.
It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan