A property valuation service consists of employing a certified real estate valuer to assess the market value of a particular piece of real estate. Market value refers to the value of a home as it pertains to current market conditions. Property valuers in Tasmania are trained for assessing worth with exhaustive efforts.
Many factors have to be taken into consideration when carrying out a valuation service. Therefore, a lot of research and data collection is required to complete valuations effectively.
Valuers also have to consider different methods for calculating value. The method is dependent on the purpose of the valuation. For residential or commercial valuations the factors that need to be considered to establish value differ. The methods available are the comparisons sales approach, income and cost approach.
The comparison approach compares the subject property to similar properties in the vicinity and compares their value. The income approach focuses more on the income potential. Whereas, the cost approach is concerned with the price of constructing the building after factoring in materials. This gives one an idea of the costs for complete replacement.
What kind of valuations services are offered?
There are numerous kinds of property valuation services available. They all value different kinds of property and often require different approaches. Some of these valuation services include:
- Market value appraisal: Valuers do market appraisals to gather information on the current condition of the market and where a property’s value is placed concerning current data.
- Rental valuation: These appraisals are carried out to figure out fair rental value prices. Factors like size, amenities, location, mortgage payments, interest rates and market information have to be analysed.
- Investment property valuation: This valuation is conducted specifically to value a commercial or residential property to assess investment potential. It’s tailored to provide data relevant investment information.
- Insurance valuations: Market value determined for insurance helps establish any replacement costs or reinstatement costs of a property. Premiums and coverage are set in relation to market value.
- Tax valuations: This service is performed to discover the value of a property. Capital gain tax is calculated in regard to overall appreciated value.
Generally, all these valuation reports and services are conducted with what’s required for the report. They all assess value but the significance of value changes according to why it’s being assessed.
Who conducts our property valuation services?
Property valuations are conducted by certified valuers who undergo extensive training and experience. They have to meet very specific criteria before they’re even considered for certification. They’re required to meet the following requirements:
- Tertiary education in the field. Anything that covers valuation practices, like a real estate degree.
- Experience or training is necessary. Valuers would have to do an internship under the guidance of an experienced and certified valuer.
- Certification through becoming a member of the API (Australian Property Institute). They continue further training of potential valuers.
- An examination is carried out to test the competency and knowledge of practices and ethical codes.
Professionals such as real estate agents also conduct appraisals. However, their process is not regulated or as tailored as those of a certified valuer. Additionally, they have a vested interest in the outcome of the valuation which may affect the valuation. Banks and lenders also conduct valuations, though the same partiality is true for them.
The mitigation of risk may influence the outcome of the report. The effects of an inaccurate valuation can be far-reaching for the individual or business concerned. Independent property valuers have no stake in your report's outcome and can guarantee objective results.
What are the advantages of having a valuation?
Investing in a real estate valuation comes with multiple advantages for both individuals and commercial enterprises.
Valuations ensure your real estate’s market value is fairly assessed. You’ll receive an impartial valuing of your estate and this means that you can secure sufficient insurance. An inaccurate valuation or estimate of the value of your home could mean over-insuring. This means you’ll pay higher premiums and under-insuring means that your insurance may not adequately cover repairs or any costs of damage.
Mortgage lenders also require valuations to approve any loan applications. Lenders use this to assess risk based on the worth of your collateral. The loan amount is decided based on market value, which makes accuracy essential to a good outcome and favourable terms. Legal disputes and taxation also require precise valuing.
In cases of divorce or deceased estate cases, valuations ensure an equitable division of assets and they ascertain fair taxation.
Over and above all cases in which they are essential, they allow individuals and businesses to make informed investment decisions. The comprehensive information provided in these reports allows for the expansion of investment portfolios and risk management. It simplifies estate planning and in more than one way aids in securing financial security by highlighting financial opportunities or how to avoid risk.
Conclusion
Valuation services are incomparable and essential to taking control of your own finances. The reports offer you the kind of detailed information that will allow for capitalisation on your asset's worth. Only certified valuation experts are equipped with the tools to give you a meticulous report. Extensive measures are taken to ensure they’re properly trained and remain up to date on new regulations.
As previously mentioned, banks and real estate agents can offer appraisals but they do not offer you peace of mind regarding the objectivity of the report. Additionally, only certified valuers know how to customise and adjust reports to a specific case. This is simply because they’ve been trained with the tools they carry out such exhaustive analytical processes.
