Are you a first-time homebuyer in WA? Well, you’ve come to the right place. At SOMO, we dedicate our days to getting first-home buyers like yourself into a space of their own, sooner rather than later! We pride ourselves on our matchmaking skills and the ability to pair house hunters with the right house and land package in Perth for them.
We have been working with first-time homebuyers for years, so we know the struggle is real! There are just too many factors that play into your dream home, especially for those who are indecisive! Not to mention all the property jargon, there is a lot stacked up against first-time homeowners if they do not know the property market.
We are going to break down today one aspect which always stumps our clients. In this instalment of SOMO’s Useful Tips, we tackle what exactly is a Property Valuation.
What is a Property Valuation?
A property valuation is an estimated market value of a property at the given time. It’s a detailed report by a certified valuer based on what the property would sell under normal market circumstances.
A property valuation aims to know the worth of the prospective property, which any possible buyer must know. A property valuation is also to figure out how much a home loan lender could allow you to borrow. This allows the lender security, as they know the value of the land if they ever need it to cover the cost of a mortgage.
It’s a necessary tool for you as a buyer but also a mitigating risk tool for a lender. Through the property valuation, they know the property’s market value should they ever need it to cover an outstanding home loan.
What is the difference between a Property Valuation and a Market Appraisal?
As detailed above, a Property Valuation is a tool for a lender to know the legal value of your piece of land for the lending process.
A Market Appraisal on the other hand, is an evaluation of the property by a Real Estate agent on how much the land would be worth in the current market. The quote from a Real Estate agent can vary from one another and is often free, whereas a Property Valuation comes at a cost.
How much do Property Valuations Cost?
Depending on your Property Valuation provider in Australia, the detailed report can cost you between $200 to $600. Remember, Property Valuations are carried out by a certified valuer. Depending on the lender, they may cover the cost of a Property Valuation.
What are the Types of Property Valuations?
There are three main types of property valuations, they are:
- Bank Valuations
- Automated Price Estimates
- Appraisal & Private Valuations
What do they look for in a House Valuation?
Property size is a key aspect of the report. It will include the number of bedrooms, land size and floor space available. Generally, an increase in floor space will add value to the property.
The bigger, the better is usually the case when it comes to property valuations. The more bedrooms or bathrooms simply means it’s worth more. But the condition of the home plays a huge role. From the paint to each fitting, the functionality, appliances, storage and bench space all come into play with the value of your property.
Outside the home, the amount of parking available plays into the value of the property, unless it’s an inner-city home where parking can be compromised for location. No matter how much effort you put into your property, the location will always play a role in its value. Proximity to schools, shopping centres, public transport, the coast and any other natural areas will boost the value of your property.
If you are getting your property valued, it’s important even if you are halfway through renovations to present the space as best as you can. Think of it as an open house. There should be no clutter in the house. Make sure lawns are freshly mowed, and garden beds are tidy. You have to put your best foot forward.
As you can see, so much goes into a property valuation. If you are still looking for some guidance on property valuations, please don’t hesitate and give us a call. We love talking to first-time homebuyers; it’s such an exciting time of your life! Give us a buzz on (08) 9202 9292. We would be honoured to be a part of your home-owning journey!