Whether you are searching for refinancing options or looking forward to releasing equity to buy an investment property, the property valuation is an important part of any finance application process. At times, the outcome of your property valuation can hinder the process of application progress. So, homeowners need to know the different types of valuations that your lender may request. Below are some effective ways to prepare your property for a good valuation.
Why Lenders do Property Valuation?
Since the lender takes security over your property to provide you funds or loans, they need to check the property’s overall value in the market. It helps them to evaluate and determine the sufficient amount of money for lending. Lenders evaluate the property and allow the borrowers to take up to 80% of the property value without incurring the mortgage insurance. To verify the property’s valuation, the lenders ask to conduct a property valuation because it is a crucial part of the loan application process.
The Types of Property Valuation Conducted
There are two major types of property valuations – Full Valuations and Automated Valuation Model.
- Automated Valuation Model or AVM – AVM is the process that relies on the purpose-built valuation system, and it develops the assessment of the property’s value. The comparable sales figure, property data, and information specific to the property are valued.
- Full Valuation – The process involves a physical inspection of the property and analyzing the comparable sales, market data, and more. The experts will take images of the property and measurement of all rooms and make notes on the property’s condition and quality.
The valuation system of each lender varies, and they have their experts for property valuation. The lender’s valuation system indicates what type of valuation is needed, and they will also assign an expert from their panel for the valuation process.
Key Preparations to be Done Before Property Valuation
1. Clean and De-Clutter the Property
When the property is tidy and appears to be well-maintained, it makes a greater difference when valued. You need to ensure that the bathrooms and kitchen are spotless and rooms are de-cluttered. The bathroom and kitchen’s hygiene and cleanliness have a greater impact on the overall impression of the property. The cluttered rooms appear to be small. You must not renovate the property before the professionals come, but you must focus on presenting your property in the best possible way.
2. Get Documentation in Order
If you are ready with a building plan, share it with the professionals to accelerate the valuation process. Some lenders may also ask for council rates notices or land tax valuations. The process will be smoother if you have all the relevant paperwork ready with you before the valuer comes.
3. Get Ready with the List of Property’s Features
Your plan might not be advertising your property to the lender, but it won’t harm you if you highlight your property’s features, especially if they are not apparent to their eyes. You must prepare a list of features and highlight them to the valuer. Things like insulation, reverse-cycle air conditioner, or details of any recent renovations and upgrades and how much it cost you must be mentioned in the list.
It doesn’t mean that you have to over-promote your property to valuer by highlighting unnecessary features. Remember, they are experts in the field and assess the value of the property using rigorous methodology. So, be smart and allow them to do property valuation their way.
4. Secure All Your Pets
Your house may have furry friends, but not everyone is friendly with pets. It is always smart to stay cautious and prefer to secure the pet in some safe places or ask your friend to take them for a few hours.
5. Be Available
The valuer demands easy access to every room of your house, and they may need assistance or help in accessing your property. But, all can’t fit another thing into their day. Don’t fret, valuers are efficient at their job, and they can adjust the timing as per your convenience. So, discuss the flexible timing and ensure availability at the assigned time for smooth property valuation.
These are some of the key preparations that you have to do before the property valuation.
Article Submitted By Community Writer
