A lot of homeowners are concerned about their property value. They might be about to refinance their home, thinking about selling or are about to turn their home into an investment property. There are so many situations that can be affected by the value of your house, so it makes sense to want to learn more about the subject.
When it comes to house valuations in Perth, there are a lot of factors that are involved in the process of determining your home’s value. By having an understanding of valuations and their many influences, you might be able to increase your house value.
What is a home valuation?
A home valuation is a formal process of finding out your property value. It involves hiring a professional valuer whose specialised skills are combined with comprehensive research, expert analysis, and a thorough inspection to accurately determine the market value of your house.
Residential property valuers can value a house in a few different ways. In most circumstances, they would either value your house via a desktop valuation or with a full inspection.
As you could probably guess from the title, a desktop valuation is when a valuer completes their work entirely from behind a desk without visiting the house.
A full inspection valuation involves the valuer seeing the property both inside and out in person. Depending on the property type and the valuation purpose, this inspection could take 15-30 minutes.
No matter how a valuer conducts their valuation, it will result in receiving a full report of every factor that affects your property value.
What affects the value of real property in a valuation?
A long list of factors affects the value of real property. This list changes with the purpose of the report and the valuation method used. For most situations, including a mortgage valuation, the following will affect the value of real property:
- Location: You have no doubt heard that when it comes to real estate, it’s all about location, location, location. This applies to real property valuations as well. Under the umbrella of location, several influences impact house value. This includes the suburb, distance to Perth CBD, street type and where your home is located on the street.
- Condition: The condition of a property matters to all types of buyers. Some may be looking to flip a house or renovate, but the vast majority of buyers are interested in move-in-ready homes. A home that is in great condition, new or has been very well maintained will have a higher value than a home that will need some work.
- Size: Naturally, a house that is larger than another on the same street, will have a higher property value. The same is said when it comes to the size of land-only properties. Not only does this influence the type of buyers that would be interested in the property, but it is an important figure for the valuer when calculating the value of your property.
- Amenities: What is available in the area, a suburb/city’s design and its infrastructure will all promote a certain lifestyle for its residents. If this lifestyle suits several kinds of tenants and buyers, then there will be more demand for properties and therefore a better property value.
- Construction: Houses built in separate decades will have been made in varied styles with different materials. Many buyers will have a preference for the kind of build for their home. It could be for aesthetics, preference or out of safety concerns. Depending on the area, and the preferences of its respective buyers, when and how a property was constructed could greatly affect value.
- Comparable Data: The comparative sales approach is one of the most used methods of valuation. It is the preferred method for many occasions including property valuations for tax purposes. A valuer looks at the sales of comparable properties that have recently sold and calculates the average price per square metre. This then is used to determine property value.
What makes a valuation higher?
You might be interested to learn what factors raise property value on a valuation to prepare for a future sale or to rent it out. Whatever the case may be, there are many things you could do to potentially get a higher valuation. This includes working on the following areas:
- Kitchen: If you are curious about how much appliances affect a valuation, it will have to depend on the rest of the kitchen. Mismatched built-in appliances or broken appliances will certainly affect the opinions of potential buyers and tenants. If a kitchen is too outdated, and in need of a lot of work or improvements, then it will mean a lower property value.
- Bathroom: A lot of home buyers and tenants are looking for bathrooms that are easy to maintain and functional for their needs. The last thing a person wants is a bathroom that causes issues more than its worth. This could be day-to-day inconveniences or major repairs/renovations down the line.
- Improvements: Small improvements can do a lot to spruce up a house. This could be such things as changing the door handles throughout the home, giving both the interiors and exteriors a fresh coat of paint or updating the lighting fixtures.
- Renovation potential: While you could certainly renovate the property for yourself, sometimes a property with a lot of renovation potential is better off left as is. If there are a lot of buyers in the area buying properties to renovate or flip, then they might be willing to increase their offer slightly to secure the property.
Improving or renovating a house does not always lead to an increase in property value. It is always best to do some research and look into the properties that are selling in your area. This can give you a better insight into what buyers want. You could also order a pre-sale valuation. This may reveal issues that need to be fixed as well as report your property’s current market value.
What hurts a home valuation?
A lot can hurt the value of your home. Some may say that it is easier to lose property value than to gain it. Here are some examples of what will badly affect a property valuation:
- Neglect: A lot of homes are neglected when it comes to maintenance and repairs. Often this is the case of mobility or financial barriers. A house that is left in a poor condition, is unclean or in desperate need of repairs, will fetch a lower price to make up for it. Does your yard affect the valuation? Yes, but it can only negatively affect your market value if it hurts your kerb appeal, is unsafe or requires a lot of improvement or landscaping to be enjoyed by the occupant.
- Poor quality renovations: It is very popular these days to have a D.I.Y. renovation. When the DIYer is inexperienced, it could damage the home in more ways than one. For example, the quality of the products could lead to a short life span for the improvements. It could also lead to an expensive repair job later if issues arise.
- Safety concerns: Valuers are very thorough when they complete their inspections. If they find that there is any unsafe element in the house such as shoddy electrical work, mould, or structural issues then they will include it in their report. It will also be considered when calculating value as this will affect future owners/occupants.
- Little infrastructure: Not all factors that can hurt your valuation are directly related to the home itself. External factors such as the state of the housing market can have a major influence. In some areas, the lack of infrastructure such as public transport, parks or nearby businesses would equal less demand from buyers, investors, and tenants. While this could get you a good deal in the moment, it might hurt when selling the property later if you move.
How to get a house valuation
To get a house valuation in Western Australia, you can enquire with a local property valuer. Independent and local are two qualities that are highly recommended outside their qualifications. An independent valuer would not be influenced by other parties such as a bank or lender. A local valuer will be more than familiar with council restrictions, laws and other local factors that could impact your house value.
To get in touch with a local independent property valuer in Perth, contact our team. Our specialists can help you get an accurate valuation, customised for your situation. Call us today for a free instant quote.