Property Valuation – What does it include?

Property Valuation – The Meaning

A property valuation is often conducted by a qualified and certified valuer on the request of a lender/credit provider who is looking to fund the purchase of a property. The valuation can also be requested by you (if required).

Property Valuations – The Need

It is an essential part of the home loan application process and is usually performed by when lenders are in the process of financing a property. The lender/credit provider will usually use their own nominated panel or preferred licensed property valuers.

Property valuation is requested for number of reasons, such as:

• To assist in the calculation of the Loan-to-Value Ratio (LVR)
• Develop an opinion of the market value of the property
• Assess the value of land, buildings, improvements and other factors that influence the current and past value of your property (i.e. the process involves both external and internal inspection of the property)

What Information is available in Property Valuation Reports?

Property valuation reports will include the following relevant property information details:

• Executive Summary - which is a summary of the report itself showing who ordered the report and who the owner of the property is to be
• Land Details – such as dimensions and area
• Title Particulars – shows the Title volume and folio numbers and any other encumbrances registered on Title
• Topography – a description of the land and the area
• Services – what infrastructure is available e.g. water, electricity, sewerage
• Town Planning - the Zoning of the property and if the buildings conform to that zoning
• Planning Constraints – whether the property has any Council planning constraints
• Environmental – if any environmental issues are in evidence
• Location – describes where the property is in relation to CBD’s and other suburbs
• Improvements, which include:

>> Dwelling Description – a brief statement of the dwelling

>> Construction – describes the materials used e.g. brick and tile

>> Accommodation – the number of rooms and the type of rooms within the building

>> PC Items – covers the kitchen, bathrooms, laundry

>> Fixtures& Features –describes such items as the air conditioning, ceiling fans and floor type, etc.

>> Other Improvements – will show a swimming pool (if installed), and fencing

>> Building Areas – shown in square meters the living, outdoor and garage areas

>> Condition

• Photographs of Improvements – photos of the building in and outside
• Comparable Sales – shows the recent sale of other properties in the same area
• Sales Evidence - lists the address, sale price and date of sale
• Risk Analysis – shows the property risk and marker risk ratings on a scale of 1-5 with 1= low risk and 5=high risk
• Comments – Valuers overall assessment of the property
• Valuation Approach

Remember that several factors constitute the property valuation report. If you keep in mind the factors mentioned in this guidebook, it will enable you in choosing the right property.

Are you considering buying a property? If you are looking for finance, Singh Finance will help you in getting the best property finance package. The firm’s home loan specialists will create a budget for you and find you the most affordable finance solution. Enquire online now.

I am a retired Accountant/Compliance & Risk Auditor married to a wonderful retired lady. I previously spent 44 years of my working life in the Westpac Group working in a number of management roles. I now work as a contractor with a reputable finance