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The truth about property valuation

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Your Investment Property | 07 Mar 2013, 12:00 AM Agree 0
Property valuation is often seen as a moving target that depends on a number of factors, but as James Freudigmann explains, there are still some core guidelines that never change
  • Lynda | 07 Mar 2013, 11:17 PM Agree 0
    I agree that an appraisal is what a selling agent will provide to a client and that it is a market indication based on some comparable sales that the agent is aware of, it is not a valuation. I find the comment, "If you rely on this and list your property for sale, you will nine times out of ten, find that this appraisal price is not an indication of real value". It is the market that determines the selling "value". You may have a diamond ring that is worth thousands of dollars but if no-one wants to pay that amount its value is irrelevant as far as "sale" goes. And why is it that valuers call agents for their opinion on the "value"?
  • Rover177 | 08 Mar 2013, 06:57 AM Agree 0
    There are four methods of valuation but in 99% of cases only the sales comparative method is used. Only once have I seen the GRM - Group Rent Multiplier used for an investment property. When the purchaser of the valuation is required to have a copy, then we'll see the job done correctly. The bank claims it is not in the "purchaser's" interest to have a copy. - meaning it is not in the ban's interest to see the comparatives used. New construction should not be compared to "used" properties. Land cost and cost per square metre or GRM (for investment property) should apply.
    When we once again see competition to the banks to provide loans, then we'll see valuations conducted correctly.
  • David Butcher | 09 Mar 2013, 03:33 PM Agree 0
    All very well and good, but the article fails to mention that there are two aspect to a valuation - one based on statistics (objective) and the other a subjective judgement of the valuer. As a lending advisor I (and my colleagues) are seeing increasing evidence of huge variations in valuations for the same property due to the subjective assessment of a valuer, even when the property has been sold under contract by auction or private treaty. Many valuers are now relying on comparative sales in forming their assessment, regardless of house improvements etc. If there are no recent sales in the immediate area comparable with the property being assessed, the valuer either looks further afield for a comparison or makes a subjective judgment - or a combination of both, and increasingly the contracted market price is being discounted as a result. Increasingly, different valuers will provide different valuations.
    It appears that valuations are not a science and the end result really depends on the experience and professionalism of the valuer.
  • geoff | 15 Jun 2014, 04:51 PM Agree 0
    As a tenant in common wishing to sell my half of a property to the other tenant We both got individual valuations with the intention of meeting in the middle from API approved companies the difference in valuations was substantial and therefore causing disagreement Is this acceptable and what next?
  • adelaidepropertyvaluations | 11 Aug 2015, 08:02 PM Agree 0
    A proper property valuation is depending on Land, Property Condition, Area etc. Those factors are very important for any property valuation services. If these all factors are favourable for your property then you will get the good responds from the buyer’s hand.
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