- Understand the benefits of valuing a property and what needs to be done when buying or selling.
- Learn the differences between a professional property value report and a market appraisal.
- Discover lenders and websites that offer these services for free.
When deciding to buy or sell a home, finding out the value of the property is a significant part of the process.
There are two main types of property valuations: those done by professional valuers (sometimes for a significant fee, and often for the purpose of setting up a mortgage) and those done by real estate agents. Often a mortgage lender will charge a fee to the borrower for this service and use their own trusted valuers.
However, there is a faster method of getting a slightly more informal idea of the worth of a house. This is where free online home valuation reports from real estate websites enter the picture.
Read on to learn how to get a free property value report.
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In this guide
What is a property value report?
A property report prepared by a professional valuer is a comprehensive document that contains a lot of information about a given property, usually including:
- Land size
- Location
- Nearby amenities
- Architectural style and condition
- Aspect and block layout
- Building size and layout, number of each type of room
- Development potential
- Any renovations required
The valuer will then use this information, plus sales history, to estimate the value of the property and indicate how the value has changed over the past several years.
A less comprehensive report, usually termed a market appraisal, can be provided through some real estate or bank websites. You simply enter the address and provide some details about the property, and a report will be emailed to you.
However, since it is necessarily less detailed, the value estimate of this kind of report is only a guide, and is not suitable for legal or home loan purposes.
When and why do you need a property valuation?
Professional and formal property valuations are usually carried out by mortgage lenders when determining how much to lend to a home loan applicant against a specific property.
The Loan to Valuation Ratio (LVR) is then calculated, and if the result is a potential loan greater than 80% of the value, Lenders Mortgage Insurance (LMI) or some other form of loan guarantee may be required.
Some other reasons to get a formal valuation include stamp duty for the purpose of change of ownership and capital gains assessment for tax obligations.
However, before you get to the stage of applying for a home loan, getting an informal property valuation done can help you narrow down your choices when buying. It can help you understand the price bracket of properties in the areas you’re interested in.
The primary determining factor for house value is how much surrounding properties have sold for. When you are selling, it can help you determine your asking price. It can also show the capital gains on a property if you are just curious about growth.
How much does a property value report cost?
While formal professional valuation fees vary – typically between $300 and $700, depending on the property and the professional employed – informal property appraisals are often totally free.
Just keep in mind that an online appraisal cannot replace a valuation by a professionally qualified valuer. A certified valuer will draw up a document that can be legally enforced. This document will also be much more accurate and comprehensive.
Lenders offering free property valuations
The following lenders sometimes offer free professional valuations to home loan applicants, or may not charge a valuation fee if the loan is approved:
However, loan fees can change regularly, so it’s always best to check with the lender in advance to find out what fees you may have to pay. Confirm all extra charges with a loan provider and ask about the property valuation fee specifically.
Websites offering free property valuation reports
Most websites will use the same databases for information. However, each report will contain different criteria. The data you have to enter about the property may be either very generic or very detailed, and the estimated property value may differ significantly from report to report.
The following websites offer free property valuation reports:
Unloan Variable Home Loan (Owner)
Interest rate (p.a.)
5.99%
Comp rate^ (p.a.)
5.90%
Max LVR
80.00%
Application fee
$0.00
Monthly repayment
$2,695.08
Total repayment
$970,228.80
Highlights
- Get a rate discount every year.
- No application fees, no account fees, and no exit fees.
- Borrow up to 80% of your home’s value.
- Refinancing only.
FAQs
Will banks accept a privately ordered independent valuation report?
This depends greatly on the lender you choose to get a mortgage with. Banks prefer to use their own valuers that they trust and know are certified. If you do get a private valuation done, you must ensure that the individual you hire is fully qualified for the job.
Even if you employ a private professional the bank may still undertake its own valuation. Be sure to directly ask the lender of your choice about their policies around property valuation.
If I need a second valuation on the same property, will this also be free?
Many lenders will only cover the initial valuation. If you need to have more than one valuation done while paying off the same loan, you may need to cover the cost.
Property valuation vs market appraisal. What’s the difference?
A market appraisal will often be conducted by a qualified real estate agent. It seeks to find the highest value a property could sell for. It is often free and does not result in a document that can be legally enforced or used by a bank, even though the criteria used to estimate the value of the house could have similarities to a property valuation.
Professionally qualified property valuers use strict criteria to find the minimum value of a property. This is done to help protect the lender in the case of loan defaults, where the property may need to be sold in order to fully repay the loan.
The verdict
Gaining insight into how much a property is worth has many uses. You can use the market appraisal reports to do preliminary research when buying a home. Alternatively, you can use it to see how much your investment has grown over the years.
The added benefit of being able to obtain estimated property values for free makes it a low-risk process. However, you must do your due diligence before buying any property, or making any related financial decisions, and be aware that a formal professional valuation, which is likely to incur a fee, will be required if you need a home loan.
