Buying into property is pretty intimidating. The market is nearly impossible to navigate without the appropriate knowledge, training and guidance. A certified valuation report is the best way to ensure you know the true market value of your investment. To get that kind of security, you’ll want to work with a
licensed independent valuer in Brisbane.
Their services centre on:
- establishing the current or past value of any property
- conducting impartial and transparent valuations
- upholding high standards for quality and accuracy.
A valuation can be performed on any kind of property and for a wide range of purposes. If you’re looking to buy your first home, establish a good rental price for a property or just enter the market as an investor, you need a good grip on what valuations can do for you.
That includes understanding:
- the role and qualifications of a Certified Practising Valuer (CPV)
- the various methods and processes that go into a property valuation
- how independent valuations differ from bank valuations and real estate appraisals.
Read on to learn more about the valuation process.
What is property valuation?
Valuations are a process or set of methods designed to establish the fair market value of any property. That could be commercial, rural, retail, industrial or
residential property. Valuations establish either current or retrospective value, depending on your needs.
The many reasons for seeking out a valuation include:
- getting professional counsel on pre-sale/pre-purchase matters
- calculating related taxes such as stamp duty or capital gains tax
- having an objective statement of value for legal affairs.
The process involves ample market research and financial analysis. It calls on extensive market knowledge and relies heavily on the comprehensive industry databases that CPVs have access to.
Property valuation process steps
Most valuations leverage a combination of three techniques: the direct comparison, cost summation and capitalisation income methods. Each is essential where possible and builds upon the findings of the last.
Direct comparison is as the name suggests. It involves utilising market databases to compare the characteristics of your property to those of similar, recently sold, properties in your area.
Your valuer makes comparisons based on the likes of your property’s:
- overall physical condition
- access to local amenities
- surrounding neighbourhood
- zoning restrictions
- environmental risk factors.
There are over 200 internal and external factors your valuer will consider before moving on to the cost summation method. Here, your valuer collects and reviews the costs involved in developing the subject property, as well as any improvements made, and adds this to the underlying land value.
The final step, the capitalisation income approach, uses the net income an asset generates to calculate its value on the market. Taken together, these steps form a full image of your property’s value.
What is a property valuer?
Independent licensed valuers or CPVs are among the most trusted professionals in the industry. Only they have the appropriate training, qualifications and experience to deliver accurate valuation reports with reliable and objective results.
CPVs are trained by the Australian Property Institute (API). As one of the most respected property organisations in Australia, the work of a CPV is held to extremely high standards.
It’s a six-year process to qualification that includes a two-year traineeship and an intensive professional interview. Any qualified valuer has completed hundreds of successful property valuations at the least.
Valuations from a CPV are:
- legally certified and admissible in court
- fully compliant with the requirements of various governing bodies
- tailored towards the individual needs of the client.
A certified report is markedly different from a bank valuation or real estate appraisal. Bank valuations are only concerned with validating home loans, whereas real estate agents estimate value in order to earn commission on the sale or rental. Both services have their place but cannot be considered objective.
How are property valuations priced?
Any good valuation is entirely customised as per the needs of the customer. As such, the price of any service is tailored to meet the scope and complexity of the valuation.
A residential or rental review valuation could differ greatly in price from an industrial or
commercial property valuation. A comprehensive valuation could be quite costly. This accounts for the extensive expertise of the valuer and the considerable workload that goes into every valuation.
Summary
If you’re eyeing your family’s new home, renting out an apartment or just interested in entering the property market as an investor, property valuers are your greatest allies. As it stands, there are no more effective or reliable means to learn any property’s value.
Licensed valuers are adequately trained to analyse everything from industrial and residential property to a business’ assets or internal accounting. They present a unique balance of property and financial expertise that is highly sought after.
Much of this is due to premiere training, support and regulation by way of the Australian Property Institute. This organisation ensures that its registered members operate according to their lofty standards for quality, transparency and consistency.
For more information on property valuations, call up one of our licensed valuers today.
