Know about the different types of property valuations
Property valuation is the process to evaluate the property’s actual value. Majorly, it is required by the property owners, real estate agents and investors. For various reasons the owner wants to know the real price of the property, to settle some family property disputes, to know the insurance premium amount (that should be paid monthly), to know about house taxes and most importantly to sell or purchase the property. The property valuation acts as a guide for investors, real estate agents and owners.
Property valuer is the professional who evaluates the property value and charges the fees as per the valuation details needed, property size and value of the property.
There are various ways to do the property valuation like –
Desktop valuation – The process of finding the property value with the limited information or the readily available information is called desktop property valuation.
This process requires the certified property valuer, who uses the information that is publicly available like tax record and study ‘comparables’ to assess the property’s value.
Mostly this method is easily applied on homes and for which comparables are easily available. However the houses in rural area and with no comparable, are not the right for desktop valuation.
Why the term “Desktop” is used – As the valuation process doesn’t need to inspect the subject property. All the work can be done by the valuer without leaving the desk, thus the process termed as “Desktop valuation”.
Kerbside Valuation – This process is performed by the property valuer or agent of the mortgage lender to check the property’s value and condition. It is also an informal way of property valuation where valuer has to come and inspect the property from ‘outside’ only. No inside inspection of the subject property is required. The valuer view the property externally to gather the information like location, neighbourhood, other influencing factors related to the property that are required for valuation.
This kind of valuation includes – Market value reports, Mortgages, Automated valuation model (AVM’s), pre-sale and pre-purchase assessment required. Like desktop valuation, kerbside valuation method can be used for residential properties. This method is not be useful for commercial property valuations.
External inspection, use of comparables, computerised information, photos as evidence are needed for kerbside valuation. This is basically designed to save valuation cost either paid by client or lender.
Full Valuation – This is the best one among all because in the full property valuation the complete analysis of the property takes place by observing each and every corner of the property minutely. In Full property valuation, valuer provides the complete report which contains the detailed information of the property structure, age and condition of the property, size, location, quality of the material used, number of rooms and bedrooms in the property, coloured pictures of the property, calculation performed to evaluate the right value of the property. It requires time to complete the valuation process and the cost occurred in this method is usually high as it needs the property valuers to be qualified and to use the analytical and observational skills at its best.
Also use of comparables to compare and find the property’s value, considering the factors which influences the property’s valuation is also vital while using full valuation method.
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