What a valuer looks for in a property
A valuer will look for a number of things when inspecting your property, but what could drag down the value and what could boost it?
It could mean the difference between whether you will be approved for finance or not.
What is a valuation?
A valuation is a formal report that is done by an accredited valuer who is registered and has completed the necessary training. Mortgage lenders use this to ensure the property is a suitable security for a loan and that the market value is enough to cover the mortgage if there is a forced sale. Therefore, it is a more detailed inspection of the property and will usually take into account features such as:
- Description of the property including number of bedrooms and land size
- Risk ratings for things like environmental risks as well as market risks
- Condition of property
- Comparable sales
- Any issues uncovered in the inspection of the property or other searches conducted
So if you are looking to refinance or sell your property, or use your equity to build your investment portfolio, there are ways to help improve the odds of getting the best valuation.
Listed below are the key factors valuers take into account when putting a price on a property.
The more floor space a property has, the better. Different lenders may have different requirements for minimum property sizes they will lend money for. If you have renovated your property to increase the overall floor space, it could help improve your valuation.
Presentation and layout
A well maintained property can make all the difference when your property is being valued. You should prepare for a valuation like you would an open house as the valuer’s opinion could affect the property’s price tag. So, it is important to tidy the lawn and gardens as well as clean up any clutter around the house.
If your property is unkempt and there is personal items and rubbish lying around, the valuer may not see the quality of the flooring and other fixtures they are obscuring.
Number of bedrooms/bathrooms
Usually the more bedrooms a property has, the more it is worth. You may find that you are able to renovate the current layout to add in an extra bedroom without compromising the entire space inside. If you have three bedrooms or more and only one bathroom, it could bring down the value, so it may also be worth putting in a second bathroom or ensuite.
The condition of the kitchen
Kitchens play a big role when selling a property, so the valuer will inspect it closely. The fittings, amount of storage, bench space, appliances and the overall space of the kitchen all count. But at the same time, it is important to not go too over the top if you decide to renovate.
If you create the ultimate kitchen with expensive fittings and benchtops but it does not match the rest of the house, it may not add as much value as you are expecting it to. The fixtures and fittings should be appropriate for the property and its surrounding area.
In a busy urban area, parking is extremely important. If you have a property in the heart of the city with a parking spot, that will boost the value straight away. However, if you are in a street where every other house has off-street parking, but you don't, it will affect the valuation.
The valuer is not just going to look inside the property. Amenities listed below can have an impact on the demand for properties and affect how much your property is worth:
- shopping centres
- public transport
- hospitals and more
If you are going to start a project, it is important to finish it before the valuer comes. If you are half way through a bathroom renovation, it could negatively impact the property’s value and have poor comments added around saleability. The lender may then insist on it being completed before they will allow you to increase your loan or won’t accept it as security if you are looking to sell to someone else. A valuer assesses the property based on how it looks that day, not on what it might look like when the renovations are done.
If you are considering renovating, one option you may wish to consider is using your home loan to fund your renovation. Some renovators refinance their home loan to access more money to finance the renovation.