04 Mar What do Property Valuers look for When Valuing a House?
If you have a property inspection coming up, you may be wondering what factors your valuer will consider in determining your property’s value.
There’s no one answer to this question. Property valuation is complex, and your valuer will make a range of considerations before determining a final value.
If you’re looking to buy or sell, your property valuation figure could determine whether or not you will receive financial approval. If you’re in the midst of a separation, the value could determine how your assets will be divided.
That’s why it’s vital to understand what residential property valuers look for when inspecting your property.
What is a residential property valuation?
Before we deep dive into how your valuer will determine your property’s value, let’s discuss what a residential property valuation is.
In short, a residential property valuation is a report reflecting your home or investment property’s current market value. Only Certified Practising Valuers (CPV) registered with the Australian Property Institute (API) can complete genuine certified valuation reports.
Residential property valuations will differ from real estate agent appraisals or online value estimates. Unlike the free appraisals many agents offer, residential property valuation reports act as legal documents reflecting a property’s actual value. A Certified Practising Valuer’s report may also be used as security for a loan or as evidence in court.
You may need a property valuation if you’re:
- Selling or refinancing your property
- Purchasing a property prior to auction
- Using your equity to build an investment portfolio
- Finalising a financial relationship following a divorce, separation, or split from a business venture
- Establishing insurance cover
- Minimising your Capital Gains Tax from an investment property
- Determining the worth of a deceased estate
Read on to learn more about the factors your residential valuer will consider when assessing your property.
1. Location and surrounding amenities
Before stepping foot into your property, a quality residential valuer will already have some idea about a property’s value based on the location and experience they have in the area.
Of course, the property’s proximity to the nearest central business district will play a significant role—but your valuer will take other local amenities into account, too.
Potential buyers and banks will look favourably upon proximity and convenient access to amenities such as:
- Public transportShopping centres
- Parks and pools
- Cafes and restaurants
As such, your residential valuer will consider your property’s distance from these amenities when determining its value.
Our licensed property valuers will also consider other location-based factors, such as the area’s; bushfire or flood risk, streetscape, crime rate, walkability, reputation, and general aesthetic appeal.
2. Presentation and layout
One crucial detail a valuer will consider when preparing your residential property valuation report is your property’s layout and presentation.
It likely comes as no surprise that a well-maintained, attractive property will achieve a greater value than an untidy dwelling.
It’s well worth preparing for a valuation in the same way you would any other property inspection or open house. Tidy your lawns and gardens and remove any excess clutter from around the home.
3. Property and land size
One of the most vital factors a valuer will consider when assessing a property is its size. This includes the home’s living area as well as the surrounding land.
In almost all cases, a larger dwelling with more land will reflect a greater value when compared with a smaller property. Of course, this depends on the location—a large, rural acreage situated 100km from the nearest city may reflect a smaller value than an inner-city townhouse on a small block of land.
4. Other land considerations
Along with the size of your property, your valuer will also take its dimensions, shape, and topography into account. They may also consider its aspect, views, optimum sun orientation (that can naturally heat and cool your home), various easements, and proximity to main roads or other sources of noise pollution.
For example, a luxurious mansion may fetch a less exceptional value than expected because of its steeply sloped yard, proximity to an airport or lack of driveway access.
5. The condition of your home
Your property’s condition is central to its value. A property in need of essential repairs may achieve a lower value than anticipated.
When inspecting your property, an experienced valuer will look out for issues such as old worn electrical wiring, plumbing concerns, and cracked walls or windows. You should also ensure your floor coverings, paintwork, and light fittings are in good condition.
The state of your kitchen and bathroom will be of particular interest to your valuer. When completing a residential property valuation, your valuer will assess your kitchen closely, considering:
- Storage space
- Bench space
- Appliance quality
- General functionality of the area
Similarly, when inspecting your bathroom, your valuer will check the quality and condition of all fixtures and fittings. Your valuer will also look carefully for signs of cracking or water damage.
6. The number of bedrooms and bathrooms
The number of bedrooms and bathrooms on your property is another crucial factor in determining its value.
Typically, the more bedrooms and bathrooms a property has, the more valuable it will be. The bedroom to bathroom ratio is also important. A family living in a five-bedroom home, for example, may struggle to share a single bathroom—two or three would be much more appealing to potential buyers.
If you’re looking to sell, and if your home layout allows, it may be worth adding a second bathroom or ensuite—especially if you’re working with three bedrooms or more.
7. Renovation and improvements
Your independent valuer will consider the condition of all improvements within and surrounding your dwelling. These considerations may include internal fitouts such as floor coverings, kitchens, bathrooms, ceiling heights, heating, and cooling, along with external improvements such as:
- Outdoor kitchens
- Swimming pools
- Detached retreats or studios
An experienced valuer will also consider your floor plan’s functionality. A home with a bathroom that is accessible only via the kitchen, for example, may reflect a lower value.
Further, even if your property is high in quality, it will still need to appeal to the market. A neutral space will attract most prospective buyers, offering them the opportunity to style the home as they see fit. It may be worth renovating your home to eliminate divisive features such as brightly-coloured carpet or dated wallpaper.
However, if you’re in the midst of renovations when your valuer comes to inspect your property, bear in mind this could negatively affect its value. Valuers will typically assess your property ‘as is’ rather than how it could look upon completion.
In such a case, your lender may ask you to complete all renovations before using your property as security or increasing your loan.
8. Parking access
A significant factor your independent valuer will consider when determining your property’s value is how easy it is to access your property. In the same way, he or she will evaluate your property’s parking arrangement.
This is especially true in busy urban areas where good parking is essential. A buyer looking for a townhouse or apartment in the heart of the local CBD, for example, will surely pay a premium for access to their own parking space.
Have another question?
Property valuations can be a complex topic. You may have further questions about how our Certified Practising Valuers (CPVs) determine the value of your property, or you may be wondering how to book an independent house valuation for your own home.
Why not chat with an expert? The team at Blanco Property Group are here to help with all your residential property valuation needs.