Property values are hard to definitively determine as the only 100% correct, actual value is what someone is willing to pay for it at any given time, like on the auction day. 

There are a number of ways different interested parties try to determine or assess a property’s value, and these valuations are open completed for various reasons.

1. Market Appraisal

What’s involved

This is an opinion from a real estate agent which is based on local knowledge and data collated from recent sales of similar surrounding properties and what attributes your particular property has, and how that may positively affect or reduce the selling price.

Why you need it

When considering selling your home you need to see what the agent believes they can sell your home for. This is also a good opportunity to see different agents personalities, selling styles and what would be involved in their marketing campaign for your home

Keep in mind

An agent who can estimate (or potentially sell) your home for the highest amount can be viewed as favourable. When shopping for agents, you need to be aware of this tactic and not necessarily choose the agent with the highest estimate. Obviously choosing an established and respected brand in real estate can give you confidence that you are getting the right advice. 

2. Bank Valuation

What’s involved

This is a more comprehensive report carried out by a qualifier valuer. They will usually visit the property then research details about the size of the allotment, type and condition of any buildings, obvious faults, layout, aspect, fixes and fittings.

They will also consider access and parking for vehicles. After visiting they will complete research on restrictions and zonings in relation to the local planning laws.

The valuer will then consider all these and compare with local sales in the area to give their final estimate. 

Why you need it

If you are looking to refinance or increase your current loan (to release equity for example), a valuation of the property will be required, so this is usually the first step in gaining an approval.

Also if you are buying a property using finance, the lender will want to confirm you are paying market price for the property they are taking as security. 

Keep in mind

Valuers are very cautious about over valuing a property, hence their estimates often come in less than what an actual sale price down the track might be.  However when valuing a property after a price has been agreed they usually agree that the contracted price reflects the market.

3. Property Report

What’s involved

This is a computer generated estimate based on information held within real estate databases.

Why you need it

This report can give you, very quickly, details about a particular property including size (including number of bedrooms, bathrooms and car spaces) as well as previous sales history. It will also include other useful information like recent nearby sales and a potential price range. This information can be useful in the early phases of property research for a particular type of home or local area.

Keep in mind

As there is no human intervention, these reports often don’t consider unique features of any particular property like specific location, aspect or build quality, so further investigation is recommended prior to opening negations.

As your broker we can assist you to determine what type of valuation is the most important at any particular time and also help arrange any type of valuation you need on your current or proposed property.

About the Authors

Katherin Dermanis

Katherin is the Principal of LJ Hooker Home Loans Northern Beaches, Sydney. Katherin manages a team of highly experienced and qualified loan writers with a goal to secure the best loan for clients particular needs, specialising in both residential & commercial finance.

Alex Ippolito

Alex is the Principal of Achieve Finance, leading mortgage advisor, broker and lending specialist located in Brookvale on Sydney's Northern Beaches. Alex's client success is due to his thorough knowledge, extensive experience and focus on developing strong relationships with clients and complementary property and loan industry experts.