Valuation is a critical part of the property journey – whether buying/selling or refinancing; impacting on how much you can borrow from the bank, and even whether you will be approved for finance or not.
A valuation has to be carried out by a registered and accredited valuer; mortgage lenders use valuers to ensure the property is suitable security for a loan, and that market value will cover the mortgage in the event of a forced sale.
What does it involve?
• Description of property including land size & floor size
• Risk ratings – environmental, market, and other
• Condition of property – a well maintained property will generally be valued more favourably
• Quality of the renovations/extensions (if applicable) – have they been finished to a high standard, are they in synchronicity with the rest of the home
• Comparable sales of similar properties in surrounding area
• Any other issues uncovered in the Building & Pest report or other searches
• Parking – for example, if you have a property in the heart of the city with a parking spot that will boost valuation, and if you don’t that will decrease it
• Surrounding amenities: how close are you to schools, public transport, shopping centres, hospitals and other amenities – access to necessary and desirable amenities is a factor that influences valuation.
• Future outlook – are there any major infrastructure works or similar planned for your ears in the future that could influence valuation in a positive or negative way? E.g.: a new school being built nearby may enhance valuation; a telephone tower opposite may decrease it – these are the kind of variables that are also considered.
If you are looking at refinancing and relying on a positive valuation to secure the amount needed or desired; there are steps you can take to enhance your property to achieve the best valuation possible in the circumstances – you cannot change the location, but you can make changes to the home to improve value and appeal. We will cover some of these next week!