For anyone with an interest in a property, valuations are a key service. Valuations are necessary for a number of circumstances and can ultimately make life significantly easier for many.
Getting a property valuation report in Sydney is the most reliable method of finding out the market value of a property. The report is a detailed document that covers every relevant factor related to the property’s value.
A report can come in long-form or short-form. Anyone who needs to find the value of a residential, commercial or industrial property can stand to benefit from an independent report.
A valuation report is legally-recognised as proof of market value. This means it can be used in a wide range of private, business, and legal circumstances.
The amount of detail included in a report will depend on the purpose of the valuation and the size of the property being looked at.
The standards for property valuation reports
As reports are seen as definitive proof of market value, a number of regulatory, legislative, and quality standards need to be met.
As such, only Certified Practising Valuers (CPV) who are registered with the Australian Property Institute (API) can prepare legally-accepted valuation reports. The API governs thousands of property professionals in the country to uphold a consistent standard of quality and accuracy in reports.
They have implemented and maintained the highest standards of professional practice, ethical behaviour, education and professional conduct for members. They provide guidance papers, technical information papers, and standards updates on a range of different valuation and property-specific topics.
The International Valuation Standards (IVS) and International Property Measurement Standards (IPMS) have been created by international parties hoping to drive a consistent global approach for the property industry.
The Australian Property Institute is a member of the International Valuation Standards Council (IVSC) and the International Property Measurements Council (IPMSC). As such, CPVs must comply with International Valuation Standards in every report.
Reports that don’t comply with the relevant standards will not be accepted as conclusive proof of market value. Valuers know exactly how to do a property valuation report in line with the relevant standards.
What is the property valuation process?
The information included in the report will depend on the property type and purpose of the report. Whether you need a commercial, industrial or residential property valuation, valuers will consider hundreds of internal and external factors.
The first step in most valuation processes is to perform a comprehensive inspection of the subject property. Valuers will go to the place in question and carefully review the property as a whole.
The CPV will take perform measurements, take pictures, and note any important details in the valuation report. To reach precise final figures, a number of factors will need to be considered. These include:
- Location
- Proximity to hospitals, schools, and public transport
- Size and space
- Building age and condition
- Street and Kerb appeal
- Number of rooms/areas
- Parking availability
- Zoning laws
- Market conditions
Valuers use a combination of trusted methods to prepare reports that accurately represent the property’s value. The three most commonly used methods are:
- The direct comparison approach
- The income capitalisation approach
- The summation approach
How long do reports stay valid?
As beneficial as these reports are, they do not last forever. Reports are made to reflect the market value of a property in the existing market conditions. As the real estate market is going through constant change, at some point the report will no longer be a true reflection of a property’s value.
In general, a report will last for around three months before a new one is needed. In some cases, it may stay valid for up to six months.
If there are any sudden changes to the building or the market, a new valuation report is needed as the value will no longer be the same. You can contact the same expert who performed the initial valuation to take care of preparing your new report.
How long does it take to prepare a valuation report?
The time it takes to complete a report will largely depend on the purpose of the report and the type of valuation being performed.
The process for desktop and kerbside valuations is a much swifter one in comparison to full-service valuations. This is, of course, due to the fact that the valuer will need to perform a physical inspection of the property in the latter.
An inspection can take anywhere from 30 minutes to a few hours long. The size of the property and the amount of detail to be included will impact the length of the inspection. A larger property will naturally involve a more extensive inspection process.
A residential valuation will usually take around 1-5 days while more complex valuations such as commercial and industrial ones could take around 5-10 days to complete.
In conclusion
A property valuation report is one of the most important documents owners, sellers and investors of real estate can use. They are used to outline the market value of a subject property or asset.
CPVs who are registered with the API have to prepare reports that are in line with the relevant International Valuation Standards (IVS) and International Property Measurements Standards (IPMS). As these reports are accepted as official proof of value, every relevant regulatory and legislative standard must be met.
A wide range of factors is considered in valuation reports. The amount of detail included is dependent on the purpose of the report. A valuation can be completed as quickly as within a day or two but may take as long as 10 days.
Valuation reports will stay valid for around three months. Any sudden changes to the building or market will mean a new report is needed.
If you would like to know more about the different types of property valuation reports, don’t hesitate to reach out. One of our experts would be happy to assist.