How many sales are included in a valuation report?
The International Valuation Standards (IVS) defines market value as “the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts”.
This means that a property is only worth what a reasonable person would be willing to purchase the asset for by taking into account all relevant factors defining the asset and comparing them to other similar assets that have exchanged within the same locale in as like for like basis as possible.
When assessing property value (in particular residential property), registered property valuers are highly skilled in making these judgements and are able to identify and scale attributes of an asset against other recent comparable sales.
A property valuer will look at the features of a property such as
- the size of the property
- the number and type of rooms
- the fixtures and fittings
- the structure and condition of the building
- the standard of the fit-out and the property’s architectural style
- ease of access to the property
- planning restrictions and local council zoning
- the property’s location and level of amenity
- the size of the land
- the aspect, topography and layout of the block
- the age of the property
- the internal living area of the property
- the ancillary improvements of the property
Valuers will search for around 3-4 business days (in some cases more) to find sales ideally within a 3-6 month period prior to the date of valuation, and will compile a list of all applicable comparable sales. This investigation can often take us through the digital inspection of up to 25 to 30 sales!
Once this list of comparable sales is compiled, an experienced valuer will then whittle down the list to select only the best indicative sales on a like for like basis. In most reports, the valuer will include around 5-7 of these selected sales.
Once the sales have been selected and included in the report, the assessment and comparison is drawn, and each sale is broken down into its attributes as listed above and judged against the subject property that is being valued. Once this judgement is made, an overall assessment of either “inferior”, “similar value range”, or “superior” is determined, which allows the valuer to further define and allocate a fair value to the subject property.
To find out more, chat with one of our friendly team members on 1300 359 886 or contact us using our form.