Market Valuation – Estate Agent vs. Valuer

An estate agent, through their market knowledge, can provide you with an appraisal of your property which is a guide of the market value. Given the agent is specialized in a local area of the market, their knowledge and expertise will deliver a strong indication of the likely sale price for your property.

On the other hand, a valuer is legally qualified to provide a formal ‘valuation’ of the property. A valuation report, which is prepared by a valuer, is a professional and legal assessment of the value of your property prepared for many different purposes, including for the sale or pre purchase of a property.

Engaging a valuer will add additional cost to the sales process, however, as an independent and unbiased view of the market it may provide you with peace of mind that the property is being priced at market rate.

 

A Professional Valuation

If you have made the decision to commission a formal valuation for your property it is important to understand the process the valuer will go through to value your property.

 

Types of Valuation

A valuer may use one of several methods to value your property:

Direct Comparison Method

The direct comparison method compares the property with the recent sales of similar properties which have been sold in the area. These sales act as a guide to assist in determining the market value of your property.

Summation Method

The summation method is the process of determining the value of the land (its size, shape, location, surrounding infrastructure and changes), and then adding the value of improvements on the land (age, style, architectural features, number of rooms, renovations, etc).

Capitalisation Method

The capitalisation approach involves applying an investment yield to the property to work out the rental income, which is then discounted to determine the market value. This method tends to be more commonly used with investment properties.

The Valuation Process

 

Before the Inspection

A valuer requires instructions in writing that a valuation is requested, specifying the purpose of the valuation along with an agreement to the valuer’s terms and conditions.

A valuer will then proceed to make an appointment to inspect the property. Before the valuer arrives, ensure the following documents are on hand:

• Contract of Sale
• Certificate of Title
• Plan of Subdivision
• Building Plans (if new)
• List of any work(s) undertaken
• Rates of Notice
• Provide Owner’s Estimate of Market Value (OEMV) but ensure you are realistic
• Local papers and newspaper sales results
• Obtain some evidence from local real estate agents
• Obtain a ‘market appraisal’ from a local real estate agent

 

During the Inspection

A valuer will look through the property both internally and externally and will take notes of key factors which influence the final valuation, such as:

• Accommodation
• Fixtures/fittings
• Features
• Measurements of the dwellings and land

After the Inspection

In addition to inspecting the target property, a valuer will also consider its surroundings; both proximity to key points of interest (schools, public transport, etc) and the neighbourhood in which the property is situated.

On this basis the valuer will then prepare a report which will take all of the information into consideration. This detailed report will include the following information:

• Title Details
• Planning
• Location Description
• Site Description
• Building Description (after an inspection has occurred, this will include detailed description of accommodation, features, living areas, etc.)
• Comparable Sales
• Valuation Figure
• Photographs of the property
• Disclaimers

http://advice.realestateview.com.au/selling/ultimate-selling-guide/2/

Has the Property Market Bottomed Out?

The latest release of the Real Estate Institute of Australia’s ‘Real Estate Market Facts’ Report has shown an increase in the national median house price compared to the previous quarter. For many in the industry, this has sparked the question of whether or not we are seeing the nation’s property market bottom out.


A look at our capital cities

Overall, three of our capital cities recorded increases in the median house prices for the March quarter. These were Sydney, Melbourne and Darwin, with the median house price increasing 1.4%, 0.9% and 6.6% respectively.

Brisbane, Perth and Canberra all remained stable over the quarter, with no change in the median house price. Year on year however all three states recorded decreases in their median house prices, falling 3.4%, 3.3% and 1.5% respectively.

Adelaide and Hobart were the only two states recording decreases in their median house prices over the quarter. Hobart recorded the largest percentage decrease of 3.3%, whilst Adelaide’s median house price fell by 2.6% over the quarter.


Capital City Median Prices







A reason to be optimistic

There is reason to be optimistic, as the economy is stronger than it has been given credit for, and property seekers are realising that perhaps the situation is not all that bad. This could well be the first sign of a return to natural and sustainable growth within the market. Further, as Australia has quite a fragmented market, we will continue to see variable results from different parts of the country. However, I am confident that prices should steadily improve from here.


By Pamela Bennett

July 16, 2012

http://blog.realestateview.com.au/2012/07/has-the-property-market-bottomed-out/#utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+ExpertView+%28Expert+View%29

Kylie's Tip of the Day...Get In Early!

Planning on a Spring sale? Beat the pack and get in early!

Buying First vs Selling First - The Pros and Cons

When it comes to selling a property, the age-old issue which you may face is should you sell or buy first? Timing, seasonality and market conditions are strong factors contributing to this decision.In order to determine which strategy may be best suited to your personal circumstances, it is important to weigh up the pros and cons of each option.

	Selling First	Buying First
Pros	There is no need to apply for a bridging loan to finance both properties. You will know the exact amount of money you will have to put towards your next purchase. You will not have any urgency to sell, therefore you can wait until you are happy with the sale price of the property.	You will have the certainty of only moving once. You can spend all the time you need to find your new home.
Cons	You may be forced to rent until you find your next home – thus you will need to move twice. You may feel pressured to find your next home and rush your buying decision.	You may be forced to obtain a bridging loan in order to finance the payments on both properties in the interim. Should your existing home not sell for the desired price, you may need to source additional funds to cover the shortfall. The burden of two mortgages could influence you to accept a lower offer.

http://advice.realestateview.com.au/selling/ultimate-selling-guide/

When is the Best time to Sell?

The timing of selling your home will largely depend on your personal circumstances and needs. However, there are certain factors such as seasonality and market conditions which you should consider when selling your property. Although these factors may influence the sale both positively and negatively, and at times cannot be controlled, it is vital to consider each carefully.

Seasonality

• Spring is considered to be the most popular season with the most sales occurring in the market. In Australia, October and November are the peak sales months.
• The Autumn season also shows strong property sales in the market. However, sales tend to be fewer in comparison to the Spring season.
• Seasonal fluctuations must be considered in conjunction with the market conditions below to determine when is the best time to sell your property.

 

Market Conditions

Market conditions may change due to many factors such as interest rates, employment, rises in living cost, etc. These factors will influence both buyer and seller demand. As a seller it is important to understand what market you are selling in as it may impact the sale price of the property.

 

Seller’s Market

A seller’s market occurs when demand for homes exceeds the amount of homes which are available for sale. This can be city wide but more often on a suburb by suburb basis.


How it may affect you:

• In a seller’s market, you are more likely to sell your property for a higher price. However, it is important not to overprice the property as this may still impact your ability to sell.

 

Buyer’s Market

A buyer’s market occurs when the number of homes available for sale exceeds the number of buyers who are looking to buy.

How it may affect you:

• In a buyer’s market, you need to ensure your price is realistic, appreciate it may take a little longer to sell and ensure you work with your real estate agent to maximise your selling price.

http://advice.realestateview.com.au/selling/ultimate-selling-guide/

Open Inspections - The Basics

Opens give potential buyers an opportunity to look at the property and will usually be for between 30 and 45 minutes once a week or fortnight. Some buyers will not make an appointment to view a property not offering open inspections because it requires a greater investment in time and money. Others prefer not to interact with an agent one-on-one for fear of the hard sell.

Your agent will organise the open inspections for you and should take your preferences into consideration, although this may not always be a possibility. If not their normal practice you can ask them to make it a condition of entry that visitors provide their contact details. This will help to secure your property against theft during the open inspection but is no guarantee, so ensure your contents insurance covers opens. If there are any personal items you don’t want people to see, they should be hidden and valuables should be locked away.

In the current market you can expect 4-8 groups per open if your home has been presented and marketed well and is not overpriced compared to the competition. If you have more, congratulations, it means the marketing is on track but if no one makes an offer within 4 weeks, there's a problem with perceived value. If your first couple of opens have few or no visitors, this is another clear indicator your home is not priced or marketed correctly.

Your agent should be on time and stay for the advertised duration. You can expect them to be well presented as your representative in the sale of your home. They are expected to treat your property and visitors with respect. They should not discuss your private information nor conduct other business in your home. You can expect your agent to turn off lights and lock up your home securely.

Your agent will ideally leave you a report detailing the number of groups through your open inspection, how they came across your property, key feedback and suggestions for next time. You can expect your agent to follow up buyers and provide you with further feedback within a few days and give you plenty of notice for your next open inspection.

Kylie's Tip of the Day...Nasty Surprises

Try not to freak out your buyers!