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​Understanding the true value of a property

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Your Investment Property | 13 Jan 2014, 05:00 AM Agree 0
Valuers have been accused of undervaluing properties, but there are a few things you can do to get a higher mark from your valuers
  • Kathryn | 16 Jan 2014, 12:26 PM Agree 0
    Great article - very comprehensive. I'm a Seller's Advocate as well as studying Valuation. I always get a Registered Valuation done on my client's properties without fail. Having been a Licensed Real Estate agent for over 22 years I know how agents can manipulate the "appraisal" price they give to prospective sellers. We never base our decision on which agent to go with based on the appraisal process, however many sellers still do! Big mistake!
  • Chris | 17 Jan 2014, 05:56 AM Agree 0
    A good article but it is written with rose-tinted glasses. Please explain how the same to be built house and land package can have valuations done for the same bank, four weeks apart, the first as an investment property and the second as an owner occupy; the discrepancy in the valuations being $60,000 weighted in favour of the owner occupy. Also need to explain why banks will only accept valuations from in-house or their approved valuers. If all valuers are qualified, any valuation should therefore be accepted. In too many new construction areas, valuations are only accepted from Sales Comparisons and not the correct form of valuation, the Cost Approach. In several years of selling investment properties, have only seen one valuation through the Group Rent Multiplier; this was a pleasant surprise and the correct method to be used for that type of property. A bank does not provide the whole valuation report is not provided to a buyer, even though the buyer pays for the valuation - not in the buyer's interest according to the bank. In the US (where I studied "appraisal," reversed terminology) because the buyer has paid for that valuation, they are required by law to have the whole report and can therefore challenge comparisons of so-called 'like' properties. When the Government sells land, the Government has set that land price for an estate. A bank cannot then say the land cost is too high - there is no land available at a lower price. Banks do control valuers.
  • David | 17 Jan 2014, 11:42 AM Agree 0
    One of the issues in Victoria (and probably other States) is that with desktop and restricted valuations, valuers are becoming increasingly reliant on comparative sales. This can be a real issue when stock levels on the market are at low levels and when no real comparable properties are available for assessment. In recent years this has become a real problem for land/build contracts in outer CBD areas because many valuers will only use settled sales registered in the Lands Office for comparison purposes. For buyers in a new greenfield development estate looking to build their dream home, any recent sales (even with unconditional contracts) will not be considered unless they are settled (i.e. the property construction has been completed). Valuers can make or break a finance deal, and unfortunately an increasing number are not reflecting the actual current market in their assessments, particularly in a rising market - relying on 3-6 month 'historic' data.
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