A property valuation report provides a mortgage lender with the information they need to determine the Loan to Value Ratio in relation to the borrowed amount.

If you’re in the process of buying a new home, you might be interested to learn that there are a number of different types of property valuations that can be used in different circumstances. 

This will typically be determined by:

1. the kind of buyer you are;
2. the type of property you are interested in, and;
3. how much information on the property is readily available.

Types of property valuation methods available in Australia

Property valuations are conducted by a Certified Practising Valuer (CPV). The types of property valuation methods that may be used include the following: 

Desktop valuation

Also referred to as a desktop estimate or electronic valuation, a desktop valuation is a type of property valuation that can be completed remotely by a CPV.

The CPV will use publicly available information to calculate the value of the property without having to inspect it.

The kind of information they typically take into consideration can include:

• The land size
• The year it was built, plus any major renovations
• The size of the house, including the number of bedrooms, bathrooms and car spaces
• The location
• The school catchment
• Local zoning laws
• Recent sales of comparable properties
• Current house price trends

Desktop valuations will generally only be acceptable for buyers who have a strong application, and for properties with a sufficient amount of information that’s publicly accessible.

If you are applying for a low-doc or low deposit home loan, for example, this kind of valuation may not be accepted by the lender, and you may instead need a more comprehensive valuation.

Kerbside valuation

A kerbside valuation, or a drive-by as it is also known, involves a CPV visiting the property but only conducting an external assessment. This can give them an idea of the condition of the property based on its exterior presentation, as well as insight into the local area.

In addition to the results of the kerbside assessment, the CPV will also factor in any of the information that would have been available for a desktop valuation.

Kerbside valuations are typically also reserved for strong application borrowers and low-risk properties.

Full valuation

A full property valuation involves the CPV conducting a full internal and external inspection of the property, including the land. They may take photos, ask the owner questions about the build, take measurements, and assess the quality of the construction and any renovations or additions. 

Full valuations are often required by lenders for higher risk applicants, or for properties that are unconventional or more difficult to assess.

Other types of home appraisals

Online property valuation

An online property valuation is an algorithmically generated valuation based on a significant amount of data and insights. This type of valuation produces a property report (or property value report), which is a document that details information about a specific property, including its estimated value, sales history and details about the area in which it is located.

Online property valuations are typically not conducted by CPVs but are used widely by lenders.

If you’re interested in an online property valuation, you might like to consider accessing a free online property report from RateCity. This can be a helpful tool when you’re house hunting, as it can provide you with the information you need to narrow down your search and make a more educated offer.

Plus, if you’re getting ready to sell your own home, the online property value report can give you an indication of your property’s value prior to booking in for a real estate appraisal.

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