Whether you’re buying, selling, or refinancing a home, you need to go through the property valuation process to determine its current market value. This impacts everything from how you price the property to your equity in a refinance, so it’s worth getting your head around it.
What are Property Valuations?
This is how you professionally assess a property’s market value, usually done by a licensed or certified valuer. It’s not dissimilar to online home appraisals, but it’s more formal and regulated since it involves the following:
- In-person inspections.
- Neighbourhood analysis.
- A thorough review of recent comparable sales in the area.
It’s how buyers and lenders know they’re getting a fair deal and how sellers know they’re not undervaluing or overpricing their property.
How Long Does it Take?
The timeframe of property valuations generally varies depending on a few factors:
- Scheduling the inspection.
- Conducting the on-site assessment.
- Completing the report.
You can get all this done in as little as 48 hours if it’s a more straightforward valuation, but expect up to a week or more for high-value properties.
1. Scheduling the Inspection
Get a date arranged with a licensed valuer. It could take around 1-3 business days if they’re flexible, but it’s always going to vary depending on their availability and the property’s location.
You can speed up scheduling by:
- Being responsive to your lender, real estate agent, or whoever’s coordinating your valuation.
- Try to accommodate the valuer’s first available slot.
2. The On-Site Assessment
This part only lasts 30 minutes to an hour for regular residential properties. They just need to examine things like the properties:
- Layout.
- Condition.
- Size.
- Location.
- Any unique features like pools, gardens, or high-end appliances.
They might take some measurements or photos to document any of those. In contrast, properties with complex structures – large estates or historical buildings – could take several hours. Just remember that this is usually the quickest phase of the valuation process.
3. Completing the Valuation Report
The valuer takes all those findings and makes a formal report afterwards, which includes a breakdown of things such as:
- The home’s features and condition.
- Neighbourhood trends.
- Comparable property sales within the last few months.
This part takes anywhere from 1 to 5 business days, depending on how complex the property is and the volume of valuations the valuer is already managing.
The final report then gets sent to the lender for review, meaning you likely won’t see the results straight away if you’re a buyer or seller. All in all, from scheduling to report delivery, the whole process can take 3 to 7 business days.
Factors That Can Affect the Timeline
Valuations can move quite quickly, but there are plenty of factors that can lead to delays. Knowing what some of these are means you can plan for any unexpected wait times:
1. Location of the Property
- Properties in high-demand urban areas have quicker turnaround times since there are more local valuers.
- Rural or remote properties might require more travel time. The valuer could also need more days to sort their own travel arrangements.
2. Property Type and Complexity
- Unique/high-value homes with rare designs, extensive land, or unusual layouts generally require more time.
- If your property has uncommon features – extensive renovations or eco-friendly upgrades – the value might need more time to adjust the assessment accurately.
3. Market Conditions
- Demand for property valuations tend to increase as interest rates drop or buyer activity is high. This creates delays – especially if the area is already lacking in local valuers.
- Market shifts, like rising or falling home prices, also mean more analysis from the valuer. It doesn’t help if comparable property data is also spare.
4. Valuer Availability
- Peak times during spring and summer (when the housing market is most active) is a time where most valuers’ schedules are going to be packed.
- National holidays or local events have a known on their availability, too. This makes planning ahead your key to getting faster appointments.
5. Lender Requirements
- Lenders might have extra requirements for their valuation report, like specific formatting or data points. This means extra steps for the valuer, which naturally takes longer.
- If you’re working with a particular lender, double-check if they’ve got a specific valuation process that might impact timing.
Tips to Help Speed Up the Property Valuation Process
Most parts of the valuation timeline are beyond your control, but there are still a few ways you can make the process smoother:
1. Prepare Your Property
- Clear any clutter from key areas so the valuer can take accurate measurements as quickly as possible.
- Ensure every room is accessible – from unlocking gates to storage areas.
2. Provide Important Property Details
- If your property has unique features or recent renovations, have the relevant documentation at hand. This could include receipts, permits, and records of upgrades – all of which help the valuer accurately assess the home’s value.
- Share any neighbourhood details that might support the valuation. For instance, new amenities or recently sold properties with similar layouts.
3. Coordinate Promptly
- Never make your real estate agent or lender wait for a response if they’ve sent you a request. Missing appointments or delaying communication will only add days to your valuation timeline.
- If you’re available for a last-minute appointment, tell your valuer or lender. It could help you secure a slot faster.
4. Stay Updated on Market Conditions
- Prices change rapidly in fast-changing markets like real estate, which could impact your valuation results. Make sure you’re staying informed about recent property sales in your areas so you’ve got a good idea of what to expect. This also lets you discuss the valuation results with more confidence.
What to Expect After the Valuation
Once the valuation report is complete, it’s submitted to the lender or requesting party. If you’re the property owner or buyer, you might also get a copy of the report. This is almost a given if any discrepancies or unusual findings are discovered.
Reviewing and Understanding the Valuation Report
The valuation report outlines your property’s estimated market value based on things such as:
- Comparable sales.
- Current market trends.
- The condition of the home.
If you feel that this valuation is inaccurate, there’s a chance you could appeal the result. This is especially true if you have recent sales data or other supporting information that could justify a higher (or lower) valuation.
What if the Valuation is Lower Than Expected?
If you’re a buyer, a valuation that’s lower than you anticipated can have an impact on the loan-to-value (LTV) ratio. This might result in a higher down payment or even renegotiating the property price.
For sellers, a low valuation might mean adjusting your asking price so you can reflect market realities. You might also need to provide additional property details to support the original valuation.
Higher-than-expected valuations are usually always more favourable. Buyers might benefit from greater equity, while sellers might decide to raise their asking price slightly to meet demand.
Conclusion
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