In New South Wales, the housing market is going through constant, and occasionally, sudden change. For property owners and investors, market fluctuations can be a cause for concern as it makes it difficult to keep track of value.
Fear not as a range of real estate valuation tools in NSW are available to help owners stay up to date with the current market value of their real estate. With expert services, those with a vested interest in property can make informed decisions.
Not all real estate valuation tools are going to stand in equal measures of accuracy and choosing the right one for your circumstances is important.
What tools can be used for determining market value?
Reviewing the different valuation tools at your disposal can help you determine which is best suited for your needs. Some helpful services and tools are:
Property valuations
A property valuation is an independent service provided by Certified Practising Valuers (CPVs) who are registered with the Australian Property Institute (API). The valuation comes in the form of a report that carefully defines the market value of a property or asset.
Of the available services, property valuations are by far the most precise. CPVs generally perform comprehensive property inspections and review every relevant contributing factor. Reports are prepared in accordance with regulatory, legislative and quality standards to guarantee a consistent standard of accuracy.
There is no risk of internal bias or outside influence when it comes to property valuation reports. Each one is prepared from an unbiased point of view using objectively available property and market data.
A valuation report is seen as official proof of value in the eyes of the law, and as such is accepted in courts across the country. All in all, valuation reports are vastly beneficial.
Real estate appraisals
A real estate appraisal is essentially an estimation of a property’s current selling value from a realtor. While realtors are often well-versed on the market, they don’t have the same qualifications or standard of expertise as Certified Practising Valuers.
A realtor also has a vested interest in the outcome of the appraisal as they stand to earn commission on any sale of the property. This puts the final figure at risk of internal bias, whether conscious or unconscious.
An appraisal can be useful for getting an idea of the state of the market, but will not be seen as official proof of market value in the eyes of the law.
Online valuations
An online valuation is an assessment of market value using an Automatic Valuation Model (AVM). This is a software-based tool used to find the value of commercial, residential and rural real estate.
Statistical modelling and a combination of property and market databases are used to determine the market value of the subject property. In general, online valuations are less accurate than other real estate valuation tools.
Still, they are useful for investors reviewing multiple properties, as it allows for rough estimates of multiple different properties at a relatively low cost.
The main advantages of property valuations
Valuation reports come with several advantages and can ultimately make life significantly easier for property owners, investors, and stakeholders.
Some of the main advantages of getting an independent property valuation report are:
Compliance with legal, regulatory and industry standards
Valuation reports are consistently prepared in line with the standards and guidelines set out by the Australian Property Institute (API), the Royal Institution of Chartered Surveyors (RICS), and the International Valuation Standards Council (IVSC).
Precise and reliable outline of market value
As stated above, independent property valuations serve as the most reliable and accurate method of finding a property’s market value. As reports are prepared by registered CPVs, they consistently reach accurate and reliable figures.
Improved negotiation power and valuable guidance
In sales or purchase negotiations, valuers can justify set prices with independent reports that clearly outline market value; leading to smoother and swifter negotiations. The information included in reports also serves as valuable guidance points for buyers and sellers of real estate.
Guaranteed fair compensation in cases of compulsory acquisition
A compulsory acquisition is a situation where government has forcibly acquired your property, either partially or fully, with the intention of fulfilling a public purpose. Property valuations can be used to outline the exact market value of the property at the time of acquisition to ensure you are sufficiently compensated.
Financial lending and mortgage purposes
For mortgage or re-financing applications, independent property valuations can be hugely beneficial. Lenders need information on the existing market value to determine the loan-to-value ratio. Reports can generally lead to a quicker application process overall.
Summary
Knowing the market value of your property investments is crucial for effective management and decision-making. As the real estate market goes through regular change, the best way to find value is to use one of the real estate valuation tools available in the state.
A few of the most commonly used valuation services are property valuations, real estate appraisals, and online valuation tools. Of these, property valuations provide the most precise and accurate assessments of market value.
Reports are prepared by API-registered CPVs with experience preparing accurate, detailed, and reliable valuation reports for all sorts of property types.
The advantages of purchasing an independent property valuation is plenty; from improved negotiations to clarity on tax obligations.
To learn more about the available valuation services in New South Wales, don’t hesitate to give us a call. One of our experts would be happy to assist.
