Finding your property’s true value
Given how rapidly the real estate market can change, it is worthwhile keeping up-to-date with the true worth of your property.
For Ray White South Perth Licensed Real Estate Agent Lisa Mann, it is crucial to know your property’s current value to understand whether it has increased or decreased due to the current sales in your street and suburbs.
“The reason it is crucial is, if you have a debt on your property, to be careful not to let this increase or be close to, or more than, the property or asset is worth,” she said. “Interest on a loan if not kept in control can have a snowball effect.
“The banks are always analysing the leverage of asset versus debt, so it is wise for you to do so as an astute owner and/or investor of your property.
“You should at least have an appraisal done every six months or year on your home, so you can ascertain whether to make an improvement on your investment like a new kitchen, bathroom, garage, alfresco or pool.
“Your local agent will tell you if this is worth doing based on the value it will add to your property if you decided to sell.”
Appraisals are usually done free of charge by a real estate agent and are an estimate or opinion of a property’s current market worth, and they have no legal standing in court. Agents base the price on recent sales and listings, combined with their local experience of the current buyer activity in your suburb and buyer demand for particular properties to determine a price.
Whereas, a valuation is conducted by a qualified valuer. It is a detailed report you are charged for and is a legal document.
“A valuation is most commonly requested by the banks to ascertain the true value and serves as a risk report to ensure the security value covers the amount borrowed should the buyer default,” Ms Mann said.
“Valuations are often required for financial reporting, taxation compliance, family law mediation, deceased estates and determining compensation given to owners for easements or land acquistions.”
When it comes to conducting a home appraisal, Ms Mann said these appointments would vary in time, depending on the size of your property.
“Local agents will have an idea what your property is worth, however another appointment with the owners is usually arranged to go through the appraisal document once it is prepared,” she said. “This document will show properties that are currently listed to see how your property will compete with what is currently on the market.
“The agent will also have a list of properties currently sold and how they compare with your property in presentation, age, size and location, helping you as an owner get a clear idea of what is the right price to list your home if you decided to sell. You will then get to keep the appraisal as your personal record.
“It’s good to discuss what improvements or renovations you are planning on doing with a local agent so they can guide you on what is important and what will add value, compared to money spent which is wasted. This way your home will also become your best asset.”
In addition, Ms Mann said staying up-to-date with the property’s true worth could give you real peace of mind and confidence.