The valuation process is an important tool if you’re looking to enter the property market. No investor should sell or buy without a concrete valuation from a qualified property valuer. To make informed decisions, you’ll need an independent valuer in Melbourne. Whether it's retail, commercial or industrial property, a licensed valuer utilises proven methods to establish fair market value.
These Certified Practising Valuers (CPVs) receive specialised training in every facet of the market. Not only are they experienced across all categories of property, but they hold singular knowledge of your specific area.
Property valuations are:
- exhaustive investigations into the current or past value of any property
- developed to aid both serious investors and everyday property buyers
- based on rigorous market research, proven calculations and deep analysis
These services are designed to support informed decision-making. That could be for buying your first home, establishing a fair rental price on your apartment or expanding your investment portfolio.
Valuations are based on an ethos of honesty, integrity and transparency. These ideals permeate every facet of an independent valuer’s training. These professionals are equipped to work closely with their clients to render impartial judgements and explain every step of the process.
What is property valuation?
Real estate valuations are an integral service for the larger property market. No matter if you’re a buyer, seller or business owner, there is a property valuation service to fit your every need.
Valuations are essentially the process of establishing an asset’s fair market value.
This could be either past or current market value, depending on the situation. If you’re looking to sell your home, you’ll want an accurate statement of its current value in order to get the ideal sale price. If you’re selling a property and need to pay your capital gains tax, you’d need a retrospective valuation to establish its value based on a past date.
The end form of any valuation is a comprehensive report.
These reports:
- come in short or long form, depending on the service provided
- are legally certified and admissible to the courts if needed
- describe the extensive methodologies involved in the investigation
- accurately state the fair market value of any asset
These reports are a critical component of numerous legal matters. That includes compulsory acquisition, property settlements, family law, deceased estate and applying for probate.
Only a licensed valuer, trained by the Australian Property Institute (API), can guarantee the level of objectivity and accuracy required for admission to the courts.
What is a property valuer?
Valuers are highly trained experts that conduct real estate valuations.
Without them, it would be far harder for investors and property buyers to confidently make informed purchasing decisions. The property market, much like any other facet of the economy, is subject to rapid and dramatic change.
Supply and demand, as well as the overall state of the national and global economies, can have significant impacts on the market. Licensed valuers, with their unique combination of market and financial expertise, are perfectly suited to helping investors navigate these changes effectively.
However, they are not the only professionals providing appraisals.
Banks, for instance, often have in-house valuers used to validate home loans. As banks are generally risk-averse, their valuations tend to be more conservative.
Real estate agents, on the other hand, may conflate prices to earn a higher commission. They are focused solely on what an asset can be sold or rented for.
Both cases represent a classic conflict of interest.
Licensed valuers:
- do not earn a commission
- are not representative of any third party
- only aim to establish fair market value
This is largely why a CPV’s valuations are considered the most objective means of determining an asset’s value.
Property valuation process steps
The accuracy of any independent valuation is fully dependent on the methods used throughout the process. All valuers are trained in a range of methods, however, three make up the crux of most services available.
They are the income, cost and comparison methods.
CPVs employ varied combinations of the above depending on what kind of property they’re reviewing. A commercial property may call for a different approach to a rural property, for example.
The income method is reserved for profit-generating properties, such as rental or retail assets. Essentially, this involves a series of calculations that use income generated as a key measure of fair market value.
This may be supplemented by the cost method. Here, valuers research and tally all costs involved in replacing the building in the event of its destruction. These could be labour costs, building materials and more.
The comparison method involves a careful review of the asset itself, as well as the surrounding market. CPVs measure a property’s value by comparing it to similar recent sales in the same area. They consider factors such as economic growth, environmental risk, access to amenities and others.
Summary
Property valuation is the most reliable means to establish an asset’s value. That covers everything from residential property valuation to national organisations or your plant and machinery assets.
A legally certified valuation report is an essential tool for anyone entering the property market. It’s an accurate means of establishing the fairest buying or rental price. It can be used to calculate property taxes or support a range of property-related legal obligations.
Property owners of all kinds should seek out the services of a Certified Practising Valuer. With their expertise, you can both save and make money and maintain the value of your investments.
For a free quote on any valuation service, call one of our CPVs today.
