As a part of your finance application, whether it be for the purchase or refinance of a home or home loan you will inevitably require a valuation of the security property or properties. We will explain what is involved from who organizes the inspection. Also types of valuations and typical method to determine the end valuation figure.
Who makes the request to get the property valued?
The valuation will always be ordered by either your broker or the lender so you don’t have to worry about who to call. It is part of the process for home loan in Brisbane as well. Once the valuation is ordered, the valuer will generally require to complete an internal inspection of the property. Which will be in his or her report.
They will call you to arrange a suitable time to carry out the inspection which should only take 15-20 mins. In the case of a rental property it can be arranged for the valuer to call your property manager to make the necessary arrangements to allow access to the property.
Different types of valuations:
There are two main types of valuations of which one or the other may be required for your home loan depending on the specifics of your application and individual lender’s valuation policy.
- Full Valuation: This is the most common and comprehensive report. It involves the internal inspection of the property. Due to the valuer physically inspecting the property it is required for the large majority of applications. And will likely be used for your application.
- Desktop or Kerbside Valuation: This type of report is completed internally by the bank’s internal valuer team. These type of valuations are generally only used by the major banks. Mostly only in certain cases where the application is deemed as a low risk by the bank’s internal systems.
How is the valuation figure determined?
In the case of a residential valuation the Direct Comparison method is used. The valuer will consider the following aspects of your property when determining a final valuation figure:
- General location and council zoning
- Specifics of the property (size, condition, number of bedrooms, bathrooms and other rooms, car space and other improvements to the property such as air-conditioning, swimming pools etc)
- Current property market conditions – market volatility, recent property market price direction
- Any environmental issues that might affect the value of the property
Once the valuer understands your particular property. They will then compare your property with similar properties in the local and surrounding arears that have sold in the last 3-6 months.
They have access to the details of these properties that have sold. Including specifics of the property, date and amount of the sale. Using this information they will then directly compare your property to those that have sold and use the sale prices of those properties as a guide for your final valuation figure.
How to Enhance the Value of Your Property
The goal of any property investment is to increase the value. You want it to be worth more than when you bought it. There are low-cost ways to add value, and there are more expensive and in-depth renovations that can be done.
There are simple things any property owner can do which can boost the appeal of your property. While these simple tips may not add tens of thousands of dollars to your property’s value, without doing them, you may not be able to realize the full potential value of your property.
These fixes can be done without having to hire any outside help. Although they are low cost, they can make a huge difference in the way your property looks.
- Clean: Making sure your property is clean will have an immediate return on the value of your property. This includes both the outside and the inside. Garbage, dirt, and strange odors are not attractive features.
- Paint: You will be amazed by the difference a fresh coat of paint can make. It can revive and brighten a tired space. Neutral colors are universally appealing.
- Add Curb Appeal: A few strategically placed plants, a new mailbox, outdoor lights or shutters can make your property more inviting. Higher cost and potentially higher return projects include new siding, new walkways or driveways, and adding a deck.
- Change Fixtures: Change out a doorknob, light switch cover, cabinet handle or even a light fixture. It’s a simple method to breathe new life into a space.
- Stage the Property: De-cluttering a space and giving each room a function can add value because many buyers lack imagination. Proper placement of furniture, the size of furniture, and the amount of furniture are also crucial.
Moderate to High-Cost Tips
There are updates you can make to a property that can have an average to high cost depending on the extent of the renovation done and the materials chosen. These types of updates have the potential to add significant value to your property:
- Add architectural detail. You can give a boring room some character by adding a chair or crown molding to it.
- Change or add windows or doors. This is a valuable addition. Not only does it improve the aesthetics of the home, but it also can reduce noise inside the home, help lower heating bills and cooling bills and increase natural light inside the home.French doors that lead out to the backyard add elegance, open up space, and allow more light to enter the property. Skylights can also help brighten up spaces that may be lacking windows or natural light.Properly positioning windows and doors can also help highlight a beautiful view that your property may have or minimize one that is not so desirable, such as a brick wall or a view right into your neighbor’s home.
- Change flooring. Updating carpet or adding hardwood or tile adds value to a property.
- Update a kitchen or bath. This includes changing a portion of the room, but not an entire gut renovation. It could be changing the flooring or changing countertops. In the bathroom, you could switch out a toilet, sink or bathtub. In a kitchen, it could include buying new appliances.
- Add more square footage. This does not only mean adding an addition to the property. It could also mean finishing an unfinished attic or a basement to add more living space to the property. It could also mean transforming an attached garage into additional living space.
Can you get a copy of the valuation report when applying for Home Loan?
The valuation report is completed for home loan purposes only and as a result it is rare that the valuation report is available to be provided to the client. Often however, we are able to let you know how much your property was valued at. It is important to also note that a valuation for mortgage purposes will generally be lower than if you were to sell your property.
Valuations for mortgage purposes are completed on the basis that the property had to be sold within 3-6 months on a forced sale basis which will usually return a lower sale price than if a normal sale was completed.
If you are thinking of completing a finance application for your home loan application in Brisbane but are unsure of what you existing property might be worth, we can ask some simple questions over the phone and quickly give you a price range that you can expect. Not only that we can quickly discuss your financial position and give you an indication of the possibility of you being approved for finance.
Edgeview Finance will help you! Contact us.