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Calculating the market value of a property
Whether you’re looking to buy or sell a home or plan to unlock the equity in your property, it’s important to know how much a home is worth. So, how do you calculate the market value of a property? There are several ways to get an idea, from recent local sales to market reports.
However, if you want a more precise residential real estate valuation, you’ll need to speak to a qualified valuer. They will look at your property’s features and flaws and make an estimate based on the current market.
How to get a free property valuation
If you search online, you can find a few websites that offer a free valuation of your property. Some of these sites ask you to enter your address and can give you an estimate of the price if your house is listed in their database. They may have a record of the size of your home and features such as the number of bedrooms, bathrooms and car parks. They may also have information about the last sale of the property and price. They use all this information to determine the house value estimate.
There are other websites that ask you to provide details of your house such as location, number of bedrooms, bathrooms, parking spots, material of construction and other features, and calculate a value based on your inputs.
Although you may find these free online results convenient when you’re wondering, “how much is my property worth?”, they are not always very accurate. There are many factors that their algorithms may miss, and which can drive the price of your home up or down. For example, you may have carried out renovations that enhance the value of your house. Recent economic activity in your neighbourhood can also affect the demand for property and impact prices. At best, these free tools that calculate your house value can provide a ballpark range and a starting point for you to do further research.
How can I get my house valued?
A house valuation is a formal process conducted by an independent professional called a valuer. The Australian Property Institute provides training and certifies qualified professionals as Certified Practising Valuers. The valuation report created by a qualified valuer is a legal document and used for a variety of purposes. When lenders are evaluating your mortgage loan application, they will need a valuation as proof of the value of the property you’re purchasing.
The valuation report given by a Certified Practising Valuer should not be confused with an appraisal given by a real estate agent. The agent is likely to have an interest in a specific deal, so the value given may not be completely objective.
The valuation process has to be done impartially and thoroughly; there is no place for emotions or shortcuts. The valuer must know the market, and compare your house with other properties to evaluate it. The valuer will consider your home’s location, size, construction, condition, and features to arrive at a valuation.
How much does it cost to get your house valued?
The fees charged by a certified valuer will depend on where you live, but you can expect it to be in the range of $300 to $600.
An online estimate, an agent’s appraisal, and a valuer’s report are some of the ways that will help you decide what you should offer for a property, if you’re buying, or how much you should ask for, if you’re selling. Finally, the market value of a home is the amount that a buyer is willing to pay for it. So you will only know this amount once serious discussions have taken place.
Disclaimer
This article is over two years old, last updated on December 16, 2021. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.
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