When you decide that you want to sell your house; this is the time for you to find out just how much it is worth on the property market. In order to find this out you need to have a property valuation conducted. This exercise can be very expensive if done independently, however, there are many banks or lenders that offer this service for free. The payment to have this done, is in fact included in your loan amount. A Property valuation, is basically a method whereby you can formulate a reasonable price for a property, be it a house, a commercial or industrial building. The amount determined is then the market value of your property. If you are only testing the waters, you can get a basic idea with a free valuation. These are offered by various Estate Agencies and the report can easily be sent to you via email.
Some of the information offered by an online valuation:
- The estimated market value of your property
- Includes the municipal valuation
- Local property trends
- Similar property sales in your area
- Selling history of the property
- May even include map or aerial views of the property
You can do a quick valuation of your property yourself, by doing research in your local community. Basically, looking at all the properties available for sale in your area, make sure to find properties that are similar to your own. The asking prices of these properties should give you a rough idea of what you can sell your property for.
How does a property valuator determine their amount? There are certain factors that need to be considered for the valuation to be as accurate as possible. A few of these factors include the location of your property, the condition the property is in, what kind of fixtures and fittings are there and the size of the property. The current local property market as well as any home improvements must also be considered.
Valuations are necessary to be able to make decisions on selling and buying property as well as in other instances, such as in the home loan process.
More purposes include:
- Property valuations are necessary for levying of rates
- To help determine the tax of the property
- In instances of deceased estates
- For investment and insurance purposes
- It helps owners decided on rental amounts
- You can also use the information to back up any objections to municipal rates
The Government has its own valuator, who determines the market value of all immovable property. These professionals are in control of providing the GVR General Valuation Roll. To gather the information, they will need to get assistance from other professional valuers, data collectors, statistical analysts and other supporting services. Properties can be viewed on the GV Roll, which can be accessed on your local municipal government website. These valuations are available every three to four years. The municipal valuation helps to make sure the rates are levied on a reasonable price.
All immovable property is placed into a certain category, so property owners should consider this as property rates that are levied depending on which category the property falls into. There are a few general categories, which include residential, industrial, commercial or business, small holdings formal as well as informal settlements amongst others.
Once property rates are collected, they are used to pay for various services, which is provided by the local municipality. This rate is calculated according to the value of the municipal property. This amount can also be affected by various improvements made to the property.
These valuators mostly use a computerized analytical system to determine the property value amounts. This is because there are numerous properties to include, so a valuator won’t really do an onsite inspection. Therefore, if you as a property owner want to dispute your municipal levies, you can do your own professional valuation, as mentioned above, to back up your objections. Currently the GV2018 Roll is being prepared for the city of Cape Town and should be available sometime during February 2019. The city of Johannesburg has already released their General Valuation Roll.
Some may be confused by terms like property or bank valuations and then market valuations or appraisals. What is the difference between these two types of valuations?
Property or Bank Valuation
When buying a home, you will most likely have to get a loan from a lender, such as a bank. The property valuation, in this instance, helps the lender ascertain the risk involved in loaning you the money.
- The bank valuation will therefore be below market value, because it is calculated to determine the lowest amount the property will cost. This is the amount the lender will get if the property must be sold because the buyer cannot make the repayments for whatever reason. The lender is looking to gain back the amount loaned out as soon as possible.
- This valuation is specifically for the lender or bank and not the buyer or seller
- To determine the valuation amount, the lender must also consider other factors in selling costs, such as legal fees and Estate Agency costs.
Property valuation or Market Valuation/Appraisal
This valuation is done by an Estate Agencies or other private companies. In this instance you will want to determine the highest price you can get for your property. This property valuation amount is what the buyer and seller should be interested in.
- This amount is always more than the bank valuation
- When determining the property valuation, the property market must be taken into consideration. This valuation is determined within a specific time frame.
- The valuation in this case helps both the buyer and seller. The seller needs to decide on the sale price of their property, while the buyer can now compare prices with other properties in the area.
Making the best out of your property valuation
You can influence the market valuation amount by making sure you do a few basic things around the house. The most obvious way is to clean up the house and do things like fix and repair any problems and tidy up the garden. Be available at the property when the valuator arrives, so you can point out various noteworthy changes that have been made, such as replaced wiring. You can show things are in working order by putting on the air conditioner on a hot day, this also showcases all the property has to offer.
Avoid starting out with a bad asking price
If you are in the process of selling property, let’s have a look at some of the things you should try to avoid when pricing your property. By doing the research and following the correct steps to determine the best-selling price for your property, you should be able to attract the potential buyers you are looking for and sell your property in a reasonable amount of time.
- The first and most common mistake is setting a selling price which is too high. A seller might see their property as the best in the area and ask for a price they think the property is worth, but the buyer will not necessarily fell the same at all. This inflated price can easily deter any serious buyers, especially if these buyers can easily access statistics and information about properties in the surrounding area.
- Don’t make an emotional decision, do your research or get a reputable Estate Agent to determine the asking price.
- Consider the search parameters of online listings. Most times currently, a buyer will first go online and search for properties. On property websites you can narrow down your search by using the options available, such as price range. It can help the seller, if they put in an asking price that is more likely to be picked up by the search engine. This is just something to consider when adding your property to a listing website.
- The next consideration follows on from the above example, try to determine an asking price that is a round number, not an unusual amount like R879 912, keep it simple.
- It might be problematic, if a seller is not open to negotiation
- Don’t choose an Estate agent who offers to sell your house at the highest price. Rather make sure your property is properly inspected, valuated and priced accordingly.
Property valuations are also something you could do as a career. You could learn to become a professional valuator who then has skills that are sought after by many. The expertise of a valuator is crucial to government, businesses, individuals and many more. The valuations may help with decisions that relate to selling, buying and other purposes. Different properties include residential, commercial, business, agricultural and industrial. The property values never remain constant, so valuators must always keep up to date with research and property trends.
There are many employment opportunities for those looking into becoming property valuators. There are a few different sectors the profession can be used in from government positions, Estate Agents, developers and within the financial sector. A person who wants to pursue this career choice must first be registered with the South African Council for the Property Valuers Profession. Any academic qualification must be recognized by the SACPVP.
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