What Is A Property Value Estimate, How Do I Get One And What Do I Receive?
Have you ever asked yourself ‘What is my house worth?’ or ‘how do I find out the value of my house or apartment?’ These are questions we get asked every day by homeowners who are either keen to find out if the value of their property has changed over the years or are looking to sell and wanting to understand what their property could be worth.
Firstly, let’s start with looking at the options you have to find out the value of your home:
- Online property value estimates
- Property appraisal with a real estate agent
- Bank valuation
Let’s take a look at these in more detail including when they are used, what information they provide you and the cost of each.
How do I value my house online?
An online property value estimate is a quick way to gauge a property’s estimated market price. You’ll find these on sites such as onthehouse.com.au, domain.com.au and realestate.com.au. These sites use property data, recent sales and property listings to instantly provide you with a price range for your property.
The accuracy of this valuation is varied because it relies on data and averages to determine the property price. The price range given is generally more reliable if:
- The property has been sold within the last 5 years
- The property is in reasonable condition
- The property hasn’t undergone major renovations or changes
- The property is relatively similar to other properties in the area\
- The surrounding area has a relatively high turnover
These online property estimates can help give you an indication of the value of a property and can be useful when you are starting your research into the local market but aren’t as reliable as an onsite property appraisal with a local real estate agent or a professional property valuation.
What information do you receive from an online property value estimate?
After entering your property’s address into the search bar, you will be provided with some high-level information on your property including:
- Details of the property as it was when it last sold including bedrooms, bathrooms, parking etc
- A price range - normally showing a low, mid and high range
- The property history - when it was last sold or rented
- Some recently sold properties in the area
House price estimate with a local real estate agent
To get a house price estimate or a property appraisal you will need to contact your local real estate agent and organise a time for them to visit and assess your property. These are informal visits, so you definitely don’t need to tidy up the house as agents are experts at seeing through the pile of clothes in the laundry and toys on the floor.
During their visit they will look at the property’s:
- Land and building size
- Number of bedrooms and bathrooms
- Number and quality of bathrooms
- Condition of the interior including the quality of appliances, fixtures and fittings
- Building structure and overall condition of the property
- Finishes, fixtures, fittings
- The quality of any renovations
- It’s location
- Proximity to amenities and lifestyle options
- Opportunity for improvement
- Local zoning restrictions
While the agent is at your home, make sure you share details about any renovations or up-keep you have done over the years, as this is valuable information they can use when working out the price guide.
What information do you receive from a property value estimate or property appraisal with a real estate agent?
The real estate agent will then spend some time comparing your property to similar properties in the area that have sold within the last 90 days and look at other market indicators to give you a comprehensive report on your property.
The report may vary but likely will include:
- Local suburb market insights including average sales value, auction clearance rates and sale price
- Recent comparable property sales and details about each property
- Case studies of successful sales outlining the method of sale, sale price, days on market and information about the interest in different properties so you can gauge local market demand
- Details about your property
- Apartment or house value estimate or a recommended price guide
Having your property appraised by a local real estate agent is an important step to take if you are looking to sell your home. Your local agent lives and breathes real estate in your local area. They understand buyer demand, what buyers are looking for and what they are prepared to pay more for. It is these emotions that can help fuel higher prices when you sell. To connect with your local McGrath Real Estate agent for property appraisal click here.
What is the market price of a property?
The market price is the price that a buyer is willing, ready and bank qualified to pay for a property and the price that the seller will accept for it.
More often than not this price varies from the original property value estimate given to the seller by the real estate agent as it is impossible to gauge an individual buyer’s emotional connection to a property, buyer demand for the property and wider market trends that may have changed during a sales campaign.
Bank property valuations
When a buyer is looking to buy a home, the lender will require an independent valuer to assess the value of the property they wish to buy. The valuer is estimating the price the lender would get for the property if it had to be sold due to the buyer not being able to pay their loan.
As a result of this, property valuations are almost always lower than the market value or property appraisal figures a real estate agent will give you, because they need to be. The banks want to make sure the home loan does not exceed the property value and that they protected from risk as much as possible.
A valuation is most important for buyers and for investors who may be looking to use the equity they have in their home to buy an investment property.
As we discuss in more detail in our article ‘What is the difference between a property valuation and a property appraisal’, bank valuations and property appraisals will always be different as sales agents assess current day value, whereas valuers look back analytically at what sales-based evidence they can find to support their opinion. Read the article here.
What information do you receive from a bank valuation?
After the analysis of the building, construction and building layout is complete, a property valuation report will be completed which will most likely include some or all of these details:
- Name of the applicants
- Name of the owner
- Address of the property
- Date of appraisal/ valuation
- Purpose or reason of valuation
- Type of property
- Structure of property
- Neighbourhood and amenities
- Details of property
- Number of floors, rooms, bathrooms
- Condition of the property
- Improvements required in property
- Renovation done in past years
- Age and estimated future life of the property
- Maintenance level of property
- Availability of front yard, backyard, garage
- Calculated fair market value of the property
- Coloured pictures of the property.
How much does it cost to get a property value estimate?
Both the online property value estimates and the face to face property appraisal with a real estate agent are completely free, come with no obligation and are a great way to find out a lot of information about your property.
Bank valuation costs vary depending on your lender, the property and how much the buyer wants to borrow. In general, you can expect to pay between $200 - $500, although your lender may offer to cover the valuation on your behalf.
A final word
If you are interested in finding out if your property has increased in value over the years, looking to sell your property or considering buying a home or an investment property, we hope this article has helped clarify where and how you can get a property valuation, the information you’ll receive and when they should be used. If you’d like to talk to your local McGrath real estate agent about your property and its value click here.
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