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Property valuer inspecting a home's exterior with a clipboard.

How Property Valuers Work

Getting an accurate property valuation is a crucial part of buying, selling or investing in real estate. But how exactly do professional valuers determine a property’s worth? Here’s an overview of valuer qualifications, the appraisal process, and why appraisals matter.

Valuer Qualifications

Property valuers must complete extensive education and certification to professionally appraise properties. In Australia, valuers are accredited by the Australian Property Institute (API). To gain API certification, valuers complete a degree in property economics along with 1-2 years of supervised work experience.

They must pass exams on valuation methods, law, and ethics. Ongoing professional development education is also required to maintain API accreditation. Look for the API logo when choosing a qualified valuer.

The Valuation Process

The valuation process involves careful inspection, data collection, analysis, and professional judgement. The valuer will first do an onsite inspection of the property to assess its condition and features. Photos and measurements are taken to determine square footage.

The valuer researches sales of comparable properties sold recently in the same area. Adjustments are made for differences in size, condition, upgrades, etc. Current market factors like high demand or low inventory are also considered.

The valuer applies accepted appraisal methodologies to this data to reach a final property valuation. The documented appraisal report outlines how the value was determined and includes supporting comparable sales data.

Why Appraisals Matter

Appraisals provide crucial information for real estate transactions. Sellers depend on appraisals to price their home competitively but also maximise profit. Buyers want to avoid overpaying and rely on appraisals during negotiations.

Lenders require appraisals to ensure the property’s value will cover the mortgage if foreclosed. Low appraisals may lead lenders to deny financing approval. Appraisals also establish fair tax assessments and inform investment decisions.

In summary, qualified property valuers carefully inspect, analyse data, and apply expertise to reach accurate appraisals. These certified valuations help guide major financial decisions for buyers, sellers, investors, and lenders.