16 January 2020

The Business of Property Valuation - All You Need to Know

Photo by Gustavo Zambelli on Unsplash
When you want to buy property, it is advisable to seek the professional opinion of a valuer regardless of whether it is your first time as a buyer or seller. The certified valuer will give you a reliable estimate of the value of the property you are interested in buying or selling. Property valuation in the world of real estate today has a lot of benefits for various reasons ranging from sales listing, taxation, financing to property insurance, and investment analysis.

Whether it is commercial real estate or residential properties, there is a process that is implemented to ensure all properties meet the market value so that you, as either the buyer or the seller, get your money's worth.

For every valuation of the property done, the certified valuer will look at four critical elements of the property in question:

  • Demand
  • Scarcity
  • Transferability
  • Utility

Demand; you have to have a need for the property in question and the financial capability to acquire the said property.

Scarcity; you need to know how many properties of the same value are in circulation in the market. This will help determine how finite the supply is, which in turn affects your property's value.

Transferability; an equally important aspect of commercial property valuations Brisbane falls under the ability of the ownership rights between the seller to the buyer. The smoother the transference of the property, the better the value of the property.

Utility; when you buy or sell a property, you want to ensure you, as a buyer or a seller, give something worth its value and will satisfy the buyer's needs.

The relationship between value and cost

The cost of the property refers to the expenditure on things like labor and materials. Price, on the other hand, is the amount in total that you will pay for a property.

During the valuation of your property, two types of valuation will be used:


This is the market information that you will need to guide you through pricing and other information you may need on the property.

Formal valuation

The formal evaluation is more accurate in approximating the value of the property you are interested in buying or selling. Under formal evaluations, things like features of the property, local Council zoning, location, the building’s structure and condition/faults, recent sales, etc. will matter. A market valuation is heavily dependent on your buyer's emotions.

Property valuation and market valuation

Property valuation should also not be confused with market valuation as the two have a clear distinction. With market value, you will be looking for the best price that a buyer will be willing to offer for the property in a competitive market. Property valuation, on the other hand, is carried out by a third party, usually a bank, agent, or lender and relies on data rather than human subjectivisms.

The importance of property valuation

There are two benefits associated with carrying out a property valuation of your property. The first benefit is that it gives you a definitive price of your property, which will be based on the current value of your home.

Knowing the asking price of your property also allows you to be able to plan ahead by going over your budget. This will give you an estimate of what you will be able to move as well as afford it during your move. This is important, especially if you are looking to buy another property.

So, what happens during property evaluation?

The first thing you will do is meet with a certified agent who will conduct the valuation for you. You can set up a meeting between you and the agent and give your agent the opportunity and enough time to assess the property you wish to sell.

Your interaction with the agent responsible for valuing your property, you need to do the following:

Be truthful; property valuation is all about facts and needs to be as objective as possible to get the best outcome.

Be open with your information; everything relevant to the property you want to be evaluated should be given upfront to the agent to make their work easier and speedier instead of them having to look for it themselves.

Prepare the paperwork; this is crucial as it gets your agent up to speed on what they need to do for you.

Ask questions; it is better as a property owner to ask as many questions and request clarifications in case of doubt over the valuation process. This will allow you to have all the information you need to make you better prepared to sell your property. This especially so when you feel like the valuation of your property is incorrect.

You should also take note that the whole process of property valuation consumes time and, as such, needs to be done as earliest as possible to meet any deadlines you might have.

The business of property valuation is a crucial part when it comes to buying and selling property, both commercial and residential. Knowing the right agents to approach and the process itself will allow you to not only save time but get your property's worth on the open market.

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