There comes a time when you are asked to supply a sworn property valuation in Sydney. Usually, this is on the most formal of occasions, but other times it is simply for your peace of mind and due diligence.
What is a sworn valuation?
A sworn property valuation is a legally binding report of value. This report is unique to the subject and can present the item’s current market value, retrospective value or another relevant value figure that is most appropriate for the use case.
Who conducts a sworn valuation?
For a valuation report to be considered a sworn valuation, it must be created by a sworn valuer. This is a valuer that has been through the necessary education and training to satisfactorily meet the requirements of such bodies as the Australian Taxation Office, Revenue NSW, and the Courts.
The easiest way to ensure your valuation is produced by the right professional is to hire a Certified Practising Valuer (CPV). This is a property expert that has been accredited by the respected Australian Property Institute.
When do I need a sworn valuation?
Sworn valuations are made for a variety of purposes. They are complex reports that are custom-made per the requirements of the instructing party, the property, and the purpose of the valuation.
The common reasons some need a sworn valuation include:
- Property settlements
- Related party transfers
- Determining tax liability
- Handling the estate of a deceased person
- Applying for insurance or mortgage security
Of course, a sworn valuation can be used for more than these formal occasions. A sworn valuation may be used for advising the sale or purchase of real estate. Investors often use valuations to weigh and assess the potential of a property.
The difference between long-form and short-form reports
Sworn valuation reports come in two forms. There is the short-form report and the long-form report. The report that is supplied by a CPV will likely be the correct report for the situation. Here are the differences between the two and when they are to be used.
Short form
This is the most common form of a sworn valuation. It is used for such things as rent reviews, pre-purchase assessments, mortgage security, divorce settlements and more. It is a detailed report that is usually between 13-15 pages long. The first few pages generally have key information such as the address of the property, a brief description, the purpose of the report, how it was conducted and by whom.
Long form
As the name suggests, the long-form report is a much more substantial report than the short-form. It is no less than 25 pages in length and goes into much further detail about every element that would have been mentioned in the shorter report. Long-form reports are generally reserved for Court use but may also be required in other circumstances that demand it.
While this report is considerably more in-depth that is not to say that it is any more accurate than a short-form report. It is more of an expansion of much of the same information and analysis that would have also been a part of the process of completing a short-form report.
How are sworn valuations completed?
How a sworn valuation report is completed and what is included depends heavily on the purpose. The are two main ways to conduct a valuation. The first is known as the desktop approach, where a sworn valuer employs their many resources to complete a valuation from behind a desk. If the required report is a standard short-form and there is plenty of online data, it will likely be a desktop valuation.
The second approach is the full inspection. Sworn valuers visit the valuing property to meticulously examine its characteristics, condition and build quality. This inspection can take 15-30 minutes, but larger estates may require more time.
How much does a sworn valuation cost?
Short-form reports that were completed without an inspection would be the most affordable option and can be completed within a shorter timeframe. Both forms of reports can be quite expensive, depending on the key factors determining price including:
- The purpose of the sworn valuation report.
- The type of property being valued. Residential properties cost less to value than commercial.
- Where the subject property is located. Longer travel times could mean a higher fee.
To better understand how much a report for your specific needs would cost, you should request a quote from a sworn valuation company.
Talk to your local sworn valuer
When looking for a sworn valuer in Sydney, consider Valuations NSW. Our firm has been in the business for decades and employs certified practising valuers with more experience than most. You can enquire about a free instant quote or ask us more about sworn valuations.
