Residential Property

Residential property can only be described as ‘broad’ in is type, age, location, buyers etcetera.  It’s our job as Registered Valuers to know the answers so in turn we can provide our Clients with reliable and objective advice, on each and every job.

Residential property assessments are not just figuring out what the land is worth and then adding the cost to replace the house on that land.  It’s more than that.  A good Residential Valuer is one that spends the up-front time conducting the research on sales within the street and the immediate area.  When valuing house and land, no matter the age or location, sales of both existing house and land properties are needed along with vacant land sales.

This then gives us the basis for two valuation approaches.  We in Valuer Land know them as the Direct Comparison and Summation Approaches.

Let me explain some more:

The Direct Comparison Approach establishes the sale of improved properties in the street and local area within recent times, assuming we are valuing the property as at the date of inspection as opposed to at a point in time in the past (retrospective assessment).

These searches for properties with similar internal accommodation, land area and location is completed as part of preparing the file after the Client gives us the go ahead.

The Australian Valuers approach:

My Valuers look at a minimum of 6 to 8 comparable house and land sales.  The inspection of this number of sales reveals a pattern.  In other words, if a Valuer only looks at three sales (which is common) they won’t know if one of those three sales is out of line and misguiding their assessment.

However if a Valuer inspects a sufficient number of sales, it’s easier to spot the odd one out in the bunch and to then make the decision to not rely upon that sale as it will distort the final valuation figure.

Yes this is extra work for us, but we have good pride in what we do and like to provide quality and well researched market assessments to our Clients.

The Summation Approach is the more commonly known assessment, but it in our world is generally used as a check method to the main or primary Direct Comparison Approach.  This approach does establish, again from comparable sales, but this time of Land, a land value taking into account all relevant factors such as area, location, access, zoning, slope to name but a few.

To this figure we then add the depreciated value of the dwelling and any other improvements on the land, to arrive at a total valuation figure under this method.

Interestingly in a Boom Market, the Summation Approach often does not add up to and falls well short of the Direct Comparison sales of comparable house and land.  This is because the market is moving so fast that the databases don’t keep up and sales are, by the time they get uploaded onto those databases, out of date and reflecting the market from 3 months ago.

To counter-act this issue, we keep good up to date records of comparable sales that we know are reliable for our assessments, thus we are keeping up with the market and in turn continue to provide real time market valuation assessments.

Should you require a residential property valuation please contact us on the contact details provided below, we look forward to being of assistance.

Tel: (07) 3221 2444

Fax: (07) 3221 2497

Email: admin@australianvaluers.com.au