10 practical ways to prepare for a home valuation

Knowing how much your home is worth can play an important role in getting the most out of one of your biggest financial investments. It can give you a clear picture of how much equity you have and prevent you from overcapitalising when renovating. 

To get an accurate estimate of your home’s value, it's advisable to seek out a professional property valuation. The whole process – including inspection and release of the valuation report – can take a few days, and having your property ready can make the experience simpler and more pleasant for both you and the valuer.

What is a home valuation?

A valuation is a formal assessment of how much your home is worth. It's often one of the first things you do when you decide to sell your house and is sometimes a requirement of refinancing your mortgage.

It sees a certified practising valuer (CPV) conducting an inspection and considering a range of factors, including the house's condition, location, and any major features it might offer. The valuer then prepares a formal report containing a detailed description of your home, the market, sales data of similar properties, information on how the property’s value was calculated, and other relevant details.

Importantly, a home valuation is different from a property appraisal. The latter is often conducted using property transaction data or by a real estate agent, who can provide a price estimate using their knowledge of the local market and recent sales in the area.

How does a property valuation work?

When requesting a property valuation, you should specify the purpose of the valuation and consider the valuer’s terms and conditions.

Typically, the beginning of a valuation will involve an internal and external inspection of the property. This may take between 30 minutes and a few hours, depending on the size of property. The valuer will generally then take a few days to prepare a report.

Property valuations tend to cost between $200 and $600, depending on the type of the home and report requested.

Typically, there are two ways valuers conduct home valuations:

1. Direct comparison method

This is the more common method used by valuers and compares the value of your property with recent sales of similar properties in your neighbourhood. The valuer then makes adjustments based on any material differences between the properties.

2. Summation method

In this method, the value of land is determined using several factors, including its size, shape, location, topography, surrounding infrastructure, and amendments. The values of the improvements done on the land such as architectural features and number of rooms are also taken into consideration.

Thinking about refinancing? Check out these low rate mortgage deals:

Important Information and Comparison Rate Warning

6 ways to prepare for your home valuation

While a property valuation is typically a straightforward process, it pays to undergo the necessary planning and preparation. Here are some practical ways you can make the experience simpler and more pleasant for you and the valuer:

1. Treat your valuer with respect

Common courtesy goes a long way in earning someone’s respect. You must remember that valuers are performing a full-time job that may require them to do several valuations throughout the day. Being on time, welcoming them with a smile, and offering them a drink will give them a positive impression that can last even after the process.

2. Get the important documents ready

The following documents may be needed by the valuer – having them ready can speed up the process:

• Contract of sale
• Plan of subdivision
• Certificate of title
• List of any improvements
• Building plans
• Council rates notice
• Owner’s estimate of market value
• Market appraisal from a local real estate agent

3. Make sure your house is clean and clutter free

Presenting a well-maintained home can make a huge difference during a property valuation, and it is not hard to do. Simple things like mopping or vacuuming floors, mowing the lawn, pressure-washing the front steps, doing the dishes, taking out the garbage, and eliminating clutter help present your house in a positive light.

You should also make sure your furniture doesn't block access to rooms the valuer needs to check or measure

4. Consider updating the kitchen and bathroom

If you plan on renovating to increase your home’s value, it's probably worthwhile focusing on your kitchen and bathroom. These areas are said to have the most impact on a home's value.

If you're not planning a full renovation, you could enhance your kitchen’s style by replacing cabinet handles and hardware, updating the splashback, and installing new taps. Meanwhile, small bathroom updates like painting walls, replacing tile grout, and reglazing bathtubs and sinks can work wonders in enhancing your property’s perceived value.

See rates here if you are planning for a construction anytime soon: Construction Loan Rates

5. Fix large and small defects

Complete unfinished or neglected repairs, such as leaking roof, holes in the wall, squeaky doors, or stained paintwork. These can negatively affect how a valuer sees your home. 

6. Inform the valuer of any hidden features

It could be good idea to compile a list of your home’s features, especially the ones that are not obvious. This can ensure the valuer doesn't overlook anything. Things that may not be easily noticed include newly installed air conditioners, insulation, solar panels, and flooring. You can also include details of recent renovations and the value of any luxury additions.

_{Image by Jonathan Mueller on Unsplash}