Property valuations can feel like a mystery to many buyers and sellers, but they’re a key part of every real estate transaction. Whether you’re getting ready to sell, making an offer, or applying for finance, knowing how valuations are calculated, and what types exist, can help you make confident decisions.
What a valuation actually means
In simple terms, a valuation is an estimate of what a property is worth in today’s market. It’s based on a combination of factors such as the home’s condition, location, features, orientation, recent comparable sales, and broader market trends.
A formal valuation report will outline all these considerations, giving you a clear picture of how the figure was reached.
Why valuations matter for buyers and sellers
For buyers, a valuation is often required by the bank before approving a home loan. For sellers, it’s a critical tool for setting an asking price that’s realistic and appealing to the market. Both parties can use valuations to strengthen their negotiating position and avoid costly missteps.
Different types of valuations you might encounter
Online value estimates
Many lenders and property websites offer instant price estimates when you enter an address. These automated tools can provide a rough guide to a property’s value, but they don’t replace a detailed assessment.
Bank valuations
Banks commission valuations to determine the safe lending amount for a property. These figures are often conservative, as lenders prioritise minimising their financial risk. Bank valuations focus more on protecting the loan than reflecting full market potential.
Selling agent appraisals
A local real estate agent can provide an on-the-ground appraisal after inspecting your property. These tend to be more optimistic than bank valuations, as agents consider unique property features, buyer demand, and current market trends.
Council valuations
Your local council issues a land valuation each year as part of your rates notice. While this figure determines your water, sewerage, and waste collection charges, it’s not designed to reflect current market value for selling purposes.
Independent professional valuations
Accredited valuers provide in-depth assessments that weigh a wide range of factors. These valuations are useful for buyers and sellers who want an unbiased, expert opinion before making big decisions.
How valuations compare to sale prices
The final selling price can end up higher or lower than the valuations you’ve received, depending on buyer interest, competition, and market shifts. Ultimately, a property is worth what a willing buyer will pay, but valuations remain an important benchmark in the process.
Ready to find out what your property is worth right now?
If you’d like a current market appraisal based on real, local buyer demand, I can provide a detailed, no-obligation report tailored to your home. Call me today and let’s get started on achieving your best possible result.
