Why You Should Always Get a Formal Valuation Before Buying a House

Buying a property can be an understandably nerve-racking task; after all, it’s one of the largest investments most people will make. Therefore, it is essential to have a clear understanding of what you are purchasing and its true value before signing on the dotted line.

What is a Valuation Report?

A market valuation report is a formal assessment of land and buildings or vacant land, undertaken by a professional, certified valuer. It considers a number of key factors (either related directly to the property or to data about the general, local area) to estimate the current market value.

The Main Reasons Why You Should Get a Report Before Buying

• Make Sure You’re Getting a Fair Price

In real estate, the terms ‘market value’ and ‘market price’ are often used synonymously; however, they can vary significantly.

Market Value: The price that a property would fetch in an open, competitive market environment (such as an auction). Market value is influenced by factors such as property features, the general market conditions, supply and demand.

Market Price: The price that a buyer is readily willing to pay, and the seller is willing to accept where there is no compulsion or pressure on either party.

With a formal market valuation, you can have more buying power and confidence; it offers the peace of mind that you will not over-pay on such a significant investment and that the selling agent does not waste your time with a lower estimate on the value of the property.

• Insurance

When you’re preparing to buy a house, you want to make sure it’s protected straight away; so, for accurate insurance coverage, you need an accurate valuation. Both over-insurance and under-insurance can have financial consequences:

Under-Insurance If the value of your home is underestimated and as a result, you are under-insured, you could face a serious financial loss in the event your home is damaged or destroyed. Under-estimation is often a result of guesswork, assumptions or inexperience. A formal valuation brings with it the knowledge and expertise of a qualified valuer, giving you the peace of mind that you are fully covered.

Over-Insurance Similarly, over-insurance can have significant financial consequences. Not only does it mean over-paying and excess premiums, but it runs the risk that a claim may be denied or considered fraudulent.

• Budget for Renovations

If you’re looking to invest in a property that requires a little TLC, it’s important to know it’s value before you make any commitments. This ensures you leave enough room in your budget to spend on renovations and refurbishments. In addition to this, it may prevent you from investing in aspects that may not greatly affect the value of the property.

Where to start?

To get started with your property valuation, contact our friendly team here today!