Westwood Conveyancing

Do you need help to maximise the value of your property?

Expert tips to help you best maximise the valuation of your property

For so many Australians, property is the most valuable asset we own.

So, it makes sense to make the most out of what we’ve got. 

Valuations are a great way to grasp an understanding of how much your property is worth and this is important for a number of reasons – namely to understand the equity you have in the property, to ensure you don’t overcapitalise and as a necessary step to refinance a home loan.

Valuations will always be different to what a sales agent may tell you as they assess current day value, whereas valuers look back analytically at what sales based evidence they can find to support their opinion.

Valuers are often accused of being on the conservative side, so maximising the valuation is imperative to getting the most out of your property – whether it’s an investment or your family home.

Let’s look at ...

How Valuers Assess Property Values

Valuers follow a strict processes and set guidelines to ensure they’re on the money.

The key is the definition of market value which case law defines as:

The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.

There are arguable points within this definition, but basically, the valuer is assessing what your home should sell for in its “as is” condition at a specific date and time if it had been openly and fairly marketed.

Knowing this shows why valuers won’t predict future property value movements based on musings about market direction or what renovations and improvements you hope to carry out.

It’s a “here and now” event in their eyes.

1. The Inspection

A property is typically inspected and viewed by a valuer as three interrelated elements.

1. Land – Location, position, aspect, size, dimension and topography are all considered by the valuer. They are looking for all the pros and cons across these, and other, components.
2. Dwelling – Age, size, construction, layout, accommodation, condition, utility. Again, the valuer is wandering through your home and taking in what a typical buyer would consider a plus, and a minus.
3. Ancillary (or site) improvements – Fencing, landscaping, driveway, pool, shed, pathways, tennis courts and any other extra constructions separate from the dwelling.

2. The Sales Evidence

The basic, primary method of assessment is called the Market Approach and it simply relies on comparing your property to other properties that have sold in your area recently.

By use of databases, listing portals and their local agent contacts, a valuer will gather three-to-six property sales that are nearby, recent and similar to your home and research the attributes of those properties. 

The valuer’s skill through their experience, art and science is in determining by how much in dollar terms your property is better or worse than the comparables.

The house next door sold last week for $700,000, but is smaller, older and doesn’t have a pool? Yours is worth a certain amount more than that.

An identical house across the road sold for $825,000 but on a bigger block with better views? Yours is worth less.

This progressive comparison across a collection of reasonable sales soon provides a tight range of value that gives a fair indication of what you should achieve.

There are other approaches to this valuation that help double check the figure, but using comparable sales is considered the preeminent approach.

3. The Report

With all this information collated, the valuer will now send a report to the banks.

A valuer will be making judgments about the property based on its features and condition. Location has, by and large, been the biggest bearing on value. As mentioned briefly above valuers will also look at:

• Numbers of beds, bathrooms and car spots
• Zoning, heritage restrictions and development potential
• Land size and topography
• Whether the property has a view
• Whether the property is impacted by noise from things like flight paths and main roads
• Quality of the dwelling including fittings, materials used in construction, renovations and any defects
• Design and layout of the property
• Curbside appeal and site improvements including fencing, driveway, landscaping, pool, shed, tennis courts, pathways, studios etc
• Access to amenities and public transport
• And any unique characteristics that could affect value

It’s important to realise that along with the figure, the valuer will be asked to comment on any risks associated with the property itself or the market it’s in.

For example, if high tension power lines traverse your lot, they will rate a mention.

If you’re in a single industry town and things are looking a bit dire for the major employer, expect that to be part of the report.

In some instances, risk ratings can have as much impact as the figure when it comes to whether or not you’re approved for a loan.

So if  valuations are key to building a portfolio then getting the best result possible depends on identifying ways to improve your outcome.

So let’s see what The Finance Broker says:-

1. Be nice to the Valuer  

I know it sounds petty but yes, they have feelings too.

So being accessible and working with them to make a prompt time that suits all parties will leave a positive impression with them.

Also, welcoming them and offering them a drink or just some common courtesy has never gone astray.

Valuers may do 5 or 6 valuations in a day, and after battling traffic etc. to get these done, just being courteous definitely won’t hurt your cause.

2. Clean your place up

Now, again, it’s something that is very simple and easy to do but you’d be surprised at how many valuations we get back with general comments about the property’s presentation.

Very simple things such as:

• Mow the lawns 
• Tidy the garden (remember the old saying about first impressions lasting)
• Have a neat entry
• Vacuum and clean the property to a presentable standard
• Don’t leave dishes in the sink or last night’s cooking on the stove
• Don’t leave clothes lying around
• Make sure beds are made in the bedrooms
• Neat and tidy bathrooms
• In cooler months, a scented candle burning can help too or the fire burning adding that the place is a “warm” place to live

3. Get your Lighting right

Natural light, no matter the season or where your property is, can have a huge positive impact on a property’s perceived value. If you have it – use it! And if you don’t have it, then use clever lighting solutions to make the place feel brighter and lighter.

After all, no one wants to live in a dungeon!

And in the southern states and the winter months, the warm glow of a fire can also make a property feel much more inviting.

4. Kitchens and Bathrooms 

Valuers pay plenty of attention to the condition of kitchens and bathrooms, the most expensive rooms in a property. 

It’s the old saying about the wet areas that have the biggest cost – and therefore the biggest impact. If you don’t have a budget to spend, ensure they are spotless.

If you are looking to improve or spend some money on your property, it’s often these 2 key areas that can/will have the biggest positive impact on securing that better valuation.

But remember – don’t overcapitalise.

5. Know your market and have comparables

If you know what goes on in your neighbourhood and you track local sales that are “comparable” to your property, have them available.

A valuer will respond in a far more positive way if you’ve done a bit of research have applied data to your estimate.

But don’t compare the massive sale of the mansion at the end of the street to your 2 bedroom apartment, sorry that’s not comparable.

6. Be Realistic!

Valuers aren’t market makers like real estate agents. 

Their job is to assess “Fair Market Value”.

This doesn’t mean they will offer hope of selling for an unrealistic price because someone told you that’s what you can sell for.

No, their job is to assess based on the market and like sales of properties to yours.

Valuers can cop a raw deal here about “always being on the low side” or “they are conservative”.

If you take a lot of the actions as recommended above and then you are realistic in your approach, 9 times out of 10, you’ll achieve a much better result.

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