Every Homeowner Needs a Valuation of Property
If you own real estate, you’ve probably wondered, ‘how much is my property worth?’. Even if you knew your property’s market value when you bought it, real estate market values change over time. As such, it’s highly unlikely the amount you paid for your property years ago is the same as what you would sell it for now.
To find out what your place is worth in today’s market, you will need to arrange a valuation of property. While a valuation is not the same as a sale price – which depends on who’s in the market when you sell and how much they love your place – it will give you a good indication of what your property is currently worth. In addition to giving you a sense of what you could sell for, getting your property valued can help you make a variety of financial planning decisions
Here are the top three reasons we believe every property owner needs a valuation of property.
A valuation of property can help you negotiate with your bank
The most common reason people need to know their real estate property value is that their bank requests it. Whether you’re considering refinancing or looking to buy another property, your lender will want to know what your current place is worth. This will help them calculate your equity (the difference between the current market value and the amount you still owe on your mortgage) and, by extension, your borrowing power.
If your bank needs a valuation of property, they will usually arrange for a professional valuer to inspect your property on their behalf. This valuer will assess your place against key criteria (like location, size, condition, etc.) and will often take photos of important features to support their valuation.
Your property is your biggest – and most expensive – asset
For most people, their property is their biggest investment. They spent several years saving up for their deposit and the best part of a year looking for their property. Then, when they finally managed to find and secure their property, they committed to paying it off over the next 20 – 30 years.
Having lived through this, it’s only natural you would regularly ask yourself ‘what is my property worth?’.
Most major real estate sites (like realestate.com.au and Domain) are aware of this and offer free property tracking reports that can help you keep an eye on your property’s market value. Once you have registered your interest in your property, these services will provide regular updates on its potential sale price. However, it’s important to note that, as the indicative valuations provided in these reports are only based on the details of the last sale (i.e. when you bought the property) and the general changes in the local market (i.e. average growth in the suburb since you bought), they may not be particularly accurate – for example, any increase in value from renovations you undertake will not be reflected in these property reports.
Knowing your property’s current market value can help you plan your financial future
Changes to the value of your home can have a significant impact on your overall financial situation. For example, if the value of your property increases, your equity in that property should also increase. This additional equity may be able to be leveraged to reduce your debt or to fund other investments – like another property.
For the purposes of financial planning, it’s important to have your property valued by a professional. This is a service you can organise and pay for yourself (just google ‘property valuer’ for experts in your area) or, alternatively, most real estate agents offer a free valuation service.