Property owners on the Sunshine Coast need a property valuation for many reasons. Whether you’re buying a property in Noosa, selling a home in Maroochydore, or refinancing in Caloundra, understanding the valuation process is crucial. This comprehensive article will outline how to get a valuation, associated costs, and the various types of valuations available across the Sunshine Coast region.
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Buying a property
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Selling a property
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Refinancing
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Buying investment property
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Divorce
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Superannuation fund annual valuation
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Home insurance
Independent property valuation Sunshine Coast
Licensed valuers are not the same as real estate agents. Independent valuers will charge a fee to value your property, giving you an unbiased value. Banks use property valuation services for financing properties for loan approvals.
If you are selling your home you can use independent valuation services to get an indication of your potential sale price. Of course residential valuations have a fee you will need to pay .
Instead. For free youcan have a real estate agent carry out a real estate appraisal. While these are free. They are often not unbiased. Which I will over in more detail later.
Property valuers on the sunshine coast
Buying a property
When buying a property on the Sunshine Coast, the bank funding the loan will typically organise the valuation. This fee is incurred by the bank, so you don’t have to worry about it. Banks have these property valuations done by an independent property valuer. Prior to this being carried out, the bank will need a copy of the signed sales contract and will then engage a Certified Practising Valuer for the property valuation.
Desktop property valuation
- If you have a very large deposit, so the loan-to-risk ratio is very small, the bank might consider doing a desktop valuation. This is where the licensed valuer researches comparable sales on their computer at their office and, based on the available property market data, they can ascertain a property’s value. The advantage of these for the bank is they are cheaper and faster. The disadvantage is they might not be as accurate, which is why banks would only consider this under specific circumstances.
At property valuation Sunshine Coast
- The most common type of valuation is a full internal valuation. The Certified Practicing Valuer will contact the real estate sales agent and make a day and time for them to attend the property. The valuer usually only needs 10 to 20 minutes at the property. During this time, they walk through the property, take photos, check the condition, and measure the size of the residence. Most of their research is then done at their computer, analysing local market knowledge and recent sales data.
Time frame
Once the licensed valuer has attended the property, they usually get the valuation to the bank within 24 hours. Valuers are booked in advance and can take up to a week to have a day and time they can attend the property to do the valuation. Usually, the real estate sales agent has explained to the seller that the date and time the valuer would like to book isn’t really flexible due to them being heavily booked, so the person selling the home needs to ensure the sales agent has access at this time. Of course, the sales agent will also liaise with the tenant if it’s an investment property.
- TIP: If you are a property buyer who has a property under contract subject to finance, check in with the real estate agent 5 days after the contract has been signed to see if the property valuation has been done or if it’s been booked. This is a process to ensure your bank is onto it and ensure there are not any unexpected delays. If at day 5 this has not happened, contact your broker or bank to have this chased up.
What price will the property valuation be?
Most of the time, the property valuation matches the purchase price. The reason for this is that it’s the valuer’s job to find several comparable properties that sold for a similar price, but there is also a theory that a property is worth what someone is prepared to pay for it. So if a buyer is buying a property in Buderim for $1.8m and some comparables are $1.9m and $1.7m, while you and I might think $200k is a big range, it’s safe to assume the value of this specific property is actually $1.8m as per the sales contract.
What if the valuation comes in lower? This would happen if there is overwhelming evidence that while the buyer offered $1.8m, nothing recently has sold anywhere near that and properties are all selling for $1.5m. Then the valuer really needs to carefully consider things like if the market is going up or down. If you have a strong income and high deposit, the bank will probably still lend you the money. If your income is low and deposit is low, then the bank just might not want to take the risk.
What if the valuation is higher? This is rare because the bank only needs the valuation to be the purchase price.
Do property valuers value properties low? Not really. They value properties based on comparable sales and the purchase price of the sales contract. Of course, they need to consider current market conditions. If the market is going up, and they value it at the purchase price, within 6 months it would be worth more. If the market is declining, then it’s very possible that what the buyer paid today, the property would be worth less in 6 months’ time.
Comparable properties
Selling a property on the Sunshine Coast
It’s not practical to sell a home without having an indication of the sale price you might achieve. It’s logical that everyone who wants to sell needs to do budgets around a potential sale price.
Licensed valuer when selling your property
- Way back in the global financial crisis, it was common for me to suggest that our clients have a property valuation done by a licensed valuer before putting the property on the market. The reason for this is because homeowners simply could not believe how little their property would be worth during this time. Yes, we would tell them, we would show them evidence, they just couldn’t believe it. Which is fair enough, really. Getting a property valuation by a licensed valuer is still an option but at the time of writing, it’s not common or necessary.
What’s the Cost of a property valuation by a licensed valuer
- It will depend on your location, but anywhere from $660 upwards.
Property valuation vs real estate appraisal
- First, I need to explain real estate agents are not licensed valuers, and we are not allowed to do valuations. So instead, we call them sales appraisals, market updates, or market opinions. When selling a property, most people will use a real estate agent. When selling, these are usually done by real estate agents for free.
How many real estate appraisals should you get?
- When you have a property valuation done by a licensed valuer, it’s fair to say you will only get one. People looking to sell their home really only need one from a real estate agent too, however, it’s common for them to get a few more as it allows them to also compare fees and marketing at the same time.
Disadvantages of getting a property valuation by a real estate agent
They want your business. Sadly, many real estate agents lie about the possible sales price. They have very good strategies of getting from you what you had hoped to achieve and then just agree. You might want $2M and while everything else has been selling for $1.6M, they agree. Why? Because it’s very likely you will hire them & they will then beat you down on price. It’s common and makes me sick.I lose a lot of business when I do a sales appraisal because I try to be fairly conservative when giving my opinion on a sales price. I do this because if I’m the chosen agent, I would prefer to delight the owner with the result than to disappoint them.
Don’t bring comparable sales: Many sales agents don’t even bring any comparable sales with them. They attendyour home to win your business, not give you a sales appraisal. They hope their quick talking and charm will make you list with them, and they gloss over what they think the property will sell for. Many agents have been trained to even say things like “It doesn’t matter what I think your property is worth or even what you think. It’s the buyers that matter.”
Bring a small print out: Often real estate agents will bring just a list of properties that have sold in the area, and they will not even have any idea how they compare to your property. Again, just glossing over it.
Big price ranges: I won a listing once even though my sales appraisal was the lowest of other sales agents. They had other real estate agents tell them $600k – $800k. My appraisal was $585k. So why did they hire me instead of one of the other agents? I was the only one that brought examples. Proof of what other comparable properties had been selling for. What did the others do? They just said based on their knowledge they thought the property would sell for as much as $x. Mind you, I still lose listings to other sales agents all the time because of overpricing. Just one example is where I showed them evidence a realistic sale would be around $1.2M. They listed with another agent at $1.6m. Months later they finally sold for $1.25m.
Feeding an owner’s dream: It’s fair to say every property owner wants to sell for as much money as they possibly can. If I was told I could sell my current property for around $2.5M, that sure would be exciting. Even though I know it’s not realistic, the thoughts of what I could do with that extra tax-free money on a big $2.5M sale price should get my imagination running wild. Plus, what if I am wrong and the real estate agent who told me this is right! Wow. So it’s very easy to fall into this scam. In the industry, we even have a name for it: “buying the listing” where a real estate agent gives them a promise of a big price just to be the chosen agent, in the hope they will bash down the owner on their price over time.
How can owners protect themselves from incorrect real estate appraisals?
- It’s so easy to get caught up in real estate agents’ charm, fast talking, and sales tactics. The only way to protect yourself is to do your own research. Look at the evidence sales agents have supplied you as comparable sales and google the properties yourself & come to your own conclusion of the sales agent.
Cost of a real estate appraisal by an agent on the Sunshine Coast
- Well, remember they are called appraisals. These are usually free because the real estate agent hopes you will then sell with them.
In-home or remote real estate appraisal
All real estate agents would prefer to do a free sale appraisal in the home. They do this to meet you, make a connection, and with the hope to win your business. Of course, attending the property also allows them to see the condition of the property, expect location, and maybe any improvements you’ve made.
- You won’t find many real estate agents interested in doing a remote sales appraisal. Although if your property is on the Sunshine Coast, QLD, I’ll happily do one for you. The reason they are hesitant is real estate agents lose listings all the time based on price. The agent tells them to expect a sale price of around $900k when the owner really was hoping for$1.1M, so instead of telling the sales agent, they call someone else, then another and another until they eventually find the sales agent that tells them what they want to hear that $1.1M is possible.
One or two visits
Many real estate agents like to attend the property twice. They attend the first time to walk through the home to get an idea, which should not take too long. Then they come back a second time with comparable sales they have found and go through them with you.
- For properties on the Sunshine Coast, QLD, when I am asked to do a sales appraisal, I prefer to attend once. I spend up to 2 hours doing online research to find a range of possible comparable properties. Then, when I attend, I can adjust the possible price based on what I see in person. This, of course, is only possible if the property is still similar to when you bought it. Even if it’s similar, but you have put in a new kitchen, bathroom, and ensuite, it’s still very possible to attend the property just once. If you’ve done major renovations, then yes, two visits to the property would be required.
How long
- 1st visits can be as quick as 10 minutes. The second visit I can also do as quick as 10 minutes, but sometimes people keep me at the home for up to 2 hours. It comes down to what questions they have and how much they like to see. I bring A4 printouts of every home. Plus, I can show the owners the comparable properties on my iPad , so they can see photos and other more detailed information.
Refinancing
Each year, I reassess my interest rates on my loans. Most years, I’m able to negotiate a suitable reduction with my current bank. Most recently, to get the very best rate, I had to refinance. Interestingly, with the same bank. My broker did a refinancing and saved me considerable annual interest by doing so. Something like $7,000. So all my properties had to have new valuations done.
When you refinance, the lending bank is going to need to do a property valuation by a licensed valuer. Real estate agents can’t do this. It’s something the bank will organise and pay for. The chosen valuer will contact you to make a day and time for access to the property. As mentioned above, they usually only need 10 to 20 minutes to look at the property. If you have done improvements, it’s worthwhile giving them a print-out list of what improvements you’ve done.
For example:
$30,000 new kitchen in 2018
$20,000 new ensuite in 2015
$80,000 new pool in 2014
With a property valuation, they won’t care about hidden improvements like new wiring, lights, fans, or air cons.
Buying an investment property on the Sunshine Coast
It’s common for homeowners to use the equity in their home as security to buy an investment property. If you want to buy an investment property for $1M, you usually will need a 20% deposit. But you don’t always need this in cash. If you have a home worth $1.5M and a loan of $500,000, you have considerable equity in your home, and you can use this to purchase an investment property without technically having to pay the bank anything. It’s what Kath & I did when we bought our most recent investment in Cotton Tree for $960,000.
This is a great long-term strategy for building wealth. Of course, you also need a suitable income to service the loan.
As you can see, you will need more than one valuation. A valuation on your own home to confirm you have enough equity to use as a deposit, then when you find and secure a sales contract on your investment property, you will need a property valuation on that also. All paid by the bank.
Divorce
f you are separating from your partner, firstly, sorry to hear that. It’s common for one of the parties to buy the other party out.
First, you should get a licensed valuer to do a property valuation and confirm you both agree with the figure the valuer has come up with. Then the party buying the other out needs to see if they are able to secure finance.
Unfortunately, it’s also common for the finance not to be possible, and when that happens, usually the property then needs to be sold. If a sale is required, occasionally the parties need to have a valuation done by a licensed valuer to ensure the price the property is being marketed for is fair and realistic. Yes, you can do this with a real estate agent too, but as you can see from above, sometimes they can distort the price for their own benefits.
Superannuation
Here in Australia, if you own an investment property in your super fund, every year you need to have the property valued. Interestingly, instead of having to pay a licensed valuer, it seems an appraisal from a real estate agent is an acceptable way to do this. If you are based on the Sunshine Coast, QLD, I would be happy to do a remote annual appraisal for you free of charge.
Home insurance
There is a lot of talk about the importance of having a property valuation done for insurance purposes, which is false. A property valuation is completed on the entire property, not the value of the home itself. When you are insuring your property, the insurance companies like to insure your home for its replacement cost. If you own a property worth $2M, the cost to replace the home is not $2M and is probably more like $700k. Property valuers and real estate agents have no idea about replacement value for actual homes, so having a valuation done for home insurance is not required.
Online tools
There are a lot of online tools. I have written about these before here. They should be illegal as they are rarely correct. Often I will ask a homeowner about how they came up with the price they thought their home might sell for, and they will often tell me around $1.2M, which is not correct, but it’s what an online tool assumes. Online tools are great for a fast, very rough ballpark idea. It’s not $100k, it’s not $5m, but it might be around $1M.
Here how does property price data get to RP Data
Licensed property valuers and real estate agents get their comparable properties from a paid subscription from services like RP Data and Price Finder. These companies get their data from government records and major real estate websites like domain.com.au and realestate.com.au.
Interestingly, realestate.com.au rewards sales agents who post the price a property sold for the day it settles. What I do is the day a property is unconditional, I update the property to sold and add the sold price. This then feeds to realestate.com.au that then feeds to RP data. Some real estate agents don’t do this because they are either lazy, or they don’t like other real estate agents having the information, or they like to keep advertising the property they sold for longer as some type of odd marketing strategy.
Real estate agent vs licensed valuer
Keep in mind real estate agents are not licensed valuers. Valuers have done years of study. Real estate agents can become qualified in as little as 3 days. Wild, yes, it is. So if you plan to use a real estate agent, realize they will not be doing a valuation; it would be an appraisal, and ensure you engage one that’s experienced.
Free property valuation on the Sunshine Coast
If you have a property on the Sunshine Coast and need a property valuation, as a licensed real estate agent I can assist with detailed information classed as a sales appraisal. Reach out. Happy top help.
Questions people ask abut property valuations
How can I estimate the value of a property
- If you want to do this yourself. Use an online property valuation tool like realestate.com.au RealEstate. But I have said in other articles these should be illegal as they are only a very rough guide. A better way to use to realestate.com.au and look at properties sold and use they filter to filer homes similar to yours.
What is the most accurate property valuation?
- Residential property valuations from a licensed valuer is the most accurate. A real estate agents can be to bias and vague.
Which property valuation is best?
- This is a great question because it really depends. For banks its a licensed valuer. For someone considering selling there home its very rare they will pay a property valuer to know its potential sale price. Instead, they will usually use a real estate agent
How much does a property valuation cost?
- A true property valuation will cost around $600. A appraisal from a real estate agent is free.
Do Real Estate Agents charge for valuations?
- Technically real estate agents are not licensed to do property valuations. But there real estate appraisal are free.
Other articles with helpful information
Byron Miller has over 25 years experience in the real estate industry. A licensed real estate agent in Qld. Byron is based on the Sunshine Coast and sells properties for home owners and property investors .
