For people with a vested interest in a subject property, knowing the existing market value is crucial for informed decision-making. Not just anyone will have the skills to find the market value of a property and you will likely need help from a qualified expert.
There are many available real estate valuation tools available. Not all valuation services are equal, however, and some will provide a much higher standard of accuracy and reliability than others.
An accurate valuation will give owners, buyers and sellers a clear outline of exactly how much a subject property is worth in line with the existing conditions.
he different real estate valuation tools
When you’re trying to determine the market value of a property, there are a few different tools you may be considering. A few of the main existing tools are:
Independent Property Valuations
For the most reliable, precise and legitimate way of finding the market value of a property, an independent valuation is your best bet.
These valuation reports are prepared by Certified Practising Valuers (CPVs) who are registered with the Australian Property Institute (API). The API is a governing body overseeing the quality standards for property specialists across the country.
Valuation reports are legally accepted as definitive proof of value. This means reports can be used in all sorts of private, legal and business negotiations. They can be done on residential, commercial and industrial valuations.
Real Estate Appraisals
A real estate appraisal is a service performed by a realtor who assists you with the sale of a house. Realtors often have a good understanding of the market but have an inherent interest in the potential sale of the home.
As such, there is an internal bias at play that may impact the accuracy of the final valuation. An appraisal is also not seen as definitive proof of value in the eyes of the law and can merely be used as a guideline.
Online Valuation Tools
Online tools are another way for individuals to find estimations of market value. An online tool will use automatic valuation models to determine the market value of a property.
This is the least reliable of the available property estimation tools, but can be a useful starting point when considering the purchase of multiple different properties. The report will not, however, serve as proof of market value.
What are the benefits of choosing a property valuation service?
You may be considering choosing an appraisal or online tool over a valuation service due to the associated costs. However, when it comes to value for money, independent reports far outweigh the others.
A few of the main reasons it may make more sense to go for an independent valuation includes:
- Guaranteed precision and reliability.
- Legally accepted valuation reports.
- Assistance from API-registered CPVs.
- PVs are trained and educated to prepare comprehensive reports.
- Valuable and trusted pre-sale/pre-purchase guidance.
- Serves as an analysis of strengths and weaknesses.
- Leads to improved decision-making.
- Comes in long-form or short-form reports depending on your needs.
- Used for a variety of purposes from taxation to insurance.
- Serves as official proof of value in an Australian court.
- Written from an entirely independent point of view with no outside influence.
How much does an independent valuation service cost?
While real estate appraisals and online tools are often available as free services, independent valuations come at a much heftier price.
The cost of a valuation will depend on a few different factors, namely:
- The type of property being examined.
- The purpose and scope of the valuation.
- The experience of the valuer.
- The size of the property.
- The location of the property.
There is no universal price when it comes to property valuations and how much you end up paying will depend on the above factors. The most reliable way to find out how much you could end up paying is to request a quote from a trusted property valuation company.
The downsides of appraisals and online tools
Getting a real estate appraisal or an online valuation can be a useful and inexpensive way to get information regarding a property. There are some downsides, though.
Here are a few things to be wary of before choosing either of the above services:
- They do not have the same standard of accuracy as independent valuations.
- They do not serve as official proof of market value in the eyes of the law.
- Online reports and appraisals cannot be used in court.
- Appraisals are performed by realtors with an inherent bias.
- Online valuations do not involve a property inspection.
- Appraisals and online valuations are not prepared by registered CPVs.
- The final figures are merely estimations and not seen as definitive.
Final word
A property valuation is the most reliable available tool when it comes to finding the market value of a subject property. Other tools such as online valuations and real estate appraisals do not provide the same standard of accuracy or legitimacy.
The benefits of getting an independent valuation far outweigh that of online tools and real estate appraisal services. All in all, it serves as a guaranteed method of finding the market value of a property and can be used in all sorts of legal, private and business circumstances.
For more information on real estate valuation tools available in Sydney, don’t hesitate to give us a call. As leaders of the industry, we are ready and waiting to assist.