House valuation in real estate is the process of estimating the market value of a property, and it differs from an appraisal. A property valuation report is more thorough than an appraisal, requiring a real estate valuer to visit the property to calculate its actual home.
The report can be used as a guide to buying or selling a property, and it doesn’t have an expiry date. However, it’s only relevant for six months up to a year, and if the market shifts drastically, the previous report becomes invalid. It’s advisable to re-evaluate your property every six months to avoid future inconveniences.
Reasons for House Valuation
Whether a seller or buyer, the valuation report equips you with the right information on property value. A property valuation is essential in guiding you on ways to improve the property through upgrades or repairs.
Property valuations are conducted for:
- Sale or Purchase
- Auction
- Probate
- Recompense
- Rating or Taxation
- Insurance
- Balance sheet
- Mortgage
- Loan advancement
How Long Does House Valuation Take?
Usually, a valuer or a surveyor will take a day to inspect a property thoroughly and then present a report of its worth in two days. The inspection day and valuation date are included in the report. The valuation exercise timeline can differ depending on location, property price, type, and the kind of report requested.
Some valuers don’t take long, as they only perform the exercise to ascertain that the property is located at the address provided. A full valuation can take up to seven working days, including the first day of visiting the property.
It includes a full inspection of interiors, exteriors, location, land, size, fittings, zoning restrictions, and the house heritage. If the valuer encounters issues during the process, it can take longer to complete the valuation report, but the valuer should communicate appropriately with the client.
What a Valuation Report Contains
A real estate valuation report is an official document detailing the process of valuing a property. Any buyer or seller should seek the services of a licensed valuer or surveyor to get the right estimates of a property.
The valuation report has the following contents for the document to be considered legal.
- A cover letter with information about the report
- Property Location
- Neighborhood characteristics, including a brief description of the site
- Construction and accommodation details
- Utilities and services on the property being valued
- The general condition of the property
- Tenure
- Date of inspection or valuation and motivation
- Assumptions
- Basis and method of valuation
- Opinion of value
- Any limiting conditions
- An official stamp and signature of the valuer or surveyor
How to Use a Property Valuation Report
A property valuation report is essential if you’re considering buying or selling a property. The report is useful in a court of law, government offices, or even presented to money lending institutions as proof of worth. The information in the report helps the concerned person make informed financial decisions, like when to sell.
Before a court of law, a valuation report is an official document that the courts can use to settle family feuds. A valuation report is also useful in determining the property’s value in insurance charges and taxes.
Since the valuation is conducted by a professional, they will require you to pay for the service. The cost will depend on different factors like property size and location. The fee will depend on the valuer if the time comes for revaluation.
Advantages of Property Valuation
Property valuation offers many advantages to buyers and sellers, especially if they’re making a first-time investment. The benefits include:
- Elimination of malpractice by scammers who make irritating price quotes to buyers. Professional valuers present the actual price of a property objectively.
- Interested parties can assess the pros and cons of a property from a report, including structural feasibility and advantages of being in such a location, among others. They can make an informed choice on whether to seal the deal or drop it.
- A property valuation report helps in getting appropriate insurance compensation for damages. The report prevents the property from being over or undervalued. Hence, an accurate report is cost-effective for the buyer.
- It makes selling or buying a property easy by establishing a good market rate and range to fetch the maximum Return On Investment (ROI).
- The report makes it easy to evaluate the possibility of future development. It’s also easy to judge if the property will appreciate and become profitable.
