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Why property valuation is an important investment

REAL ESTATE
By Martin Dias | August 13th 2015

When buying or selling a property, you need to have it valued to determine its worth at that particular time. The purposes for valuation include taking a mortgage, buying insurance cover, determining rental value and bookkeeping.

It is common for property owners, prospective buyers and insurance companies not agree on the right price for a property or for insurance settlements. A valuer can solve that challenge.

Often, property owners are not aware of the valuation process and as a result, are not sure what to look for, how much to pay and other relevant information.

Before buying a property, one needs to know the key elements that will act as points of reference to the lender. This information can also help home buyers to select their dream homes.

To begin with, geographical location must be considered. A property located near social amenities and infrastructure would fetch a higher valuation than one located in areas that are difficult to access.

The demand for property in some areas will also affect the value. Also, the nature of the property must come into play.

Whether a property is residential, commercial, high street, agricultural or industrial will affect its value. Different types of properties will yield varied valuations, even if they are located in the same place.

Insurers use valuation reports to determine the level of risk. It is always difficult to rent or sell a property if it is in an earthquake, flood or landslide-prone zone.

If the property is in a dangerous or risk-prone area, the insurer may not be comfortable in approving cover. Mortgage lenders are also interested in valuation reports. The bank decides tenure on the basis of the life of the property before issuing any mortgage.

The level of maintenance of the property definitely plays a role in assessing its value.

A well-maintained old building can still fetch a good value. This is why it is always important to regularly do maintenance on your property before you carry out a valuation. Clean the compound, paint the walls afresh, replace translucent and broken glass, and ensure everything is in near-perfect state before you invite valuers to assess the property.

Property valuations are an extremely smart investment, even though sometimes people are put off by the initial cost. But valuations are relatively inexpensive when you consider the long-term savings. The good thing is that valuers are guided by a formal scale of fees under the Valuers Act.

A good property valuer and the ensuing property valuation will be worth far much more than the cost because the information you get from a valuation report will help you make many important decisions to do with your property.

Although no property valuation can be 100 per cent accurate, as a buyer or seller, it will still give you an idea of what you should be paying or receiving.

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