Are you thinking of building a new home or maybe starting your investment portfolio?
Will you be using the equity in your current home?
Do you know the difference between an Appraisal and a Property Valuation?
If you are considering using the equity in your home (the difference between your properties value and what you owe on your mortgage) to build a new home or start your investment portfolio you will need to have a Property Valuation done. This is a complex process which requires a licensed and registered valuer to attend your property and give you an independent valuation of what your house is worth in today’s market.
The valuer will need to consider the following factors when valuing your property,
- Where your property is located
- The structure of the building and whether it has any structural faults
- How the property is presented internally and externally
- Does the property have parking and easy access
- Any special features of the property and renovations which the property has
- If there are any planning restrictions
- The zoning from the local council
- If there are any caveats or encumbrances on the property
The bank will use this valuation and what you owe on your mortgage to determine how much equity you have and then they can calculate how much they may be willing to lend you to make your new purchase.
An Appraisal on your property is done by a Real Estate Agent when you are looking at selling your home and should reflect the value of similar properties within your area. This valuation may generally be slightly higher than the bank valuation because Agents are vying to get your business. Appraisals are the opinion of the agent and generally they have no legal standing and are free, whereas you will need to pay for a valuation.