If you're buying a property, a valuation is an absolutely essential step in the journey. It allows you to get an accurate and clear indication of the property value, and will ultimately inform your buying decision.
What is a property valuation?
A property valuation is a certified and professional opinion on the monetary value of a property or piece of land. Any kind of property transaction requires this sort of professional opinion as each property is unique, and a variety of factors will help determine its value. There are two main kinds of property valuations: appraisals (market valuations) or formal valuations.
Appraisals vs Formal Valuations
The purpose of an appraisal differs from a formal valuation; the former is a guide to pricing normally given by real estate agents, and no fee is usually charged for this kind of valuation. On the other hand, formal valuations are a much more accurate estimate of the property value, and can only be undertaken buy those who are certified Valuers.
Formal valuations consider things like the location of the property, the building structure, the condition, features of the property, council zoning, recent sales and potential building or structural faults.
An important difference to note is that between the market value of a property and the actual property valuation estimate. Market value is normally the highest estimated price that someone would pay for the property in a competitive market. Its not so much a value of the actual property and its features, rather the general value it could have to buyers based on emotion.
A property valuation on the other hand is data driven, and property specific.
How much will it cost?
Pricing for property valuations can differ, but normally will start around the $500 mark - but be sure to have a look around as prices can vary. If you're going with a certain lender, a valuation fee may be included in other costs, so make sure you ask.