In accordance with their licence requirements, your valuer must inspect the property being valued. This allows the valuer to get a full appreciation of the relevant strengths and weaknesses of the property and the neighbourhood.
But this is not the only inspection your valuer will make. They will investigate recent transactions in the locality, discuss or research the impact of local planning schemes and other potential planning issues such as heritage and native title requirements, review potential contamination issues, noise issues …and the list goes on!
Ultimately, the valuer is trying to determine what the highest and best use of your property is; that is, the legal use that will yield the highest possible return.
There are a number of factors that can affect the enjoyment of your property. Some you may be aware of, some you may not.
A valuer will make an inspection of your property, but the investigation does not end there.
On site, the valuer, amongst other things, will be looking at items such as:
- The basic structure, quality of finish, presentation, size and many other issues in which the market is interested
- Running a tape measure around the building will not only give your valuer information on size, but will also give them an opportunity to look more closely at the structure of the building
- Are the buildings located within the legal boundaries?
- Are there any pest problems?
- Or possible structural problems, water intrusion, etc
- Are there any additions and what is the quality of workmanship and structural integrity? And what of safety issues if poorly executed?
- Is there any possible contamination including issues with asbestos and petroleum products?
Once your valuer leaves the property, they will research many other areas including:
- Recent market activity which will provide the initial guide to value
- Possible impact of Native Title
- Possible impact of any easements for services on your land that may impede development, even the humble garden shed
- Consideration of the highest and best use of the property such as multi-unit development or subdivision
- Restrictions or benefits under zoning laws, restrictive buffers around noxious industry, and the like
- Current and future planning issues. Will the next big freeway run past your back door?
- Are there noisy kennels nearby that you had not noticed?
Your valuer is aware of planning, building and property related issues and can give advice on how these affect your property.
However, some issues may need additional specialist advice and a valuer will be able to identify and highlight these for you.
To be able to value accurately, a valuer needs to have an understanding not just of the economics of supply and demand within the real estate market, but of land tenure, accounting, demographics, building construction, geography, property law, global economics, statistical analysis, even meteorology.
These are all things that are learnt through a university education, industry based education programs, mentors and peers and, of course, many years of valuation experience analysing the market directly.
Essentially, these skills can be summarised as,
- detailed market knowledge;
- practical experience; and
- technical expertise.
IVWA is centrally located without the hassle of being in the busy city centre. You will find us in Mount Lawley on Railway Parade, just up from the Mount Lawley subway. We are located on a quiet street where there is plenty of public parking.
From here, we have excellent access to main roads heading north, south and east and are just as happy heading west through the City.
Independent Valuers of Western Australia or IVWA is a medium sized boutique property valuation firm established in 1983.
So what does this mean to you?
It means that we are large enough to have a broad range of experiences and skills whilst being small enough to be able to give you the personal care, protection and guidance of an expert in property values that you should expect from a professional valuer.
Sounds a little clichéd, but it is the way we like to work.
We take particular pride in our product ensuring accuracy and independence as well as providing a report that gives the fullest detail and reasoning for our conclusions of value. It is not just enough to provide an accurate value; accuracy must be seen and understood which is done through the report.
There are many projects for which you should consider instructing a valuer. Some are required by the businesses and people you deal with and some just make good economic sense.
When a property is complex or the outcome more critical or you are accountable to others, it is time to consider independent valuation advice.
Many large scale businesses insist on a valuation to protect themselves and provide accountability, why shouldn’t you?
There are many, many areas where it is good practice to get a professional opinion of value. If you are not sure, give IVWA a call, we are more than happy to discuss your property issues.
In the case of mortgage lending, the lending institution will insist on an independent valuation to ensure the security of its lending. That valuation also protects you from purchasing an overpriced property. Some banks will allow you to choose your preferred valuer.
Family settlements are always difficult and agreement on the fair and equitable distribution of assets is not easy to achieve. This is where an independent valuer can ensure that the assets are correctly valued. The valuer can provide an Expert Witness report for a court to consider. The Family Court will often appoint a single valuer agreed by the parties to provide impartial valuation advice.
When the State Government resumes land, there is often a lot of distress involved. Unfortunately, the process generally cannot be stopped, but there is no reason that insufficient compensation should be accepted. Your valuer can assist in ensuring that you receive your full entitlements to compensation. We have found that acquiring authorities such as Main Roads WA will usually pay for a second or third opinion. We are happy to provide you with an obligation free quote.
Here are some more detailed examples.
We have noted that the Office of State Revenue requires the value of property share transfers and property transfers between related parties be adjudicated by the Valuer General. We understand that this can add significant time to the land transfer process. If time is critical, a private valuation will be timely and is accepted by the Office of State Revenue without review by the Valuer General.
There are very few times that a financial institution will lend money to buy property without getting a professional opinion on its value. This protects both the financier and the borrower against a poor investment decision.
Generally, financiers will have preferred valuation firms providing them with advice for which they will ask you to cover the cost. However, most are open to you getting your own advice, particularly for larger and more complex properties. You may feel more comfortable with a particular valuer that you know has specific knowledge or skill in the valuation of the property type that you are purchasing.
If you want to use your own valuer, check with your bank that they will accept that particular valuer’s advice.
Every so often, the State Government requires land for some public purpose, a use that is for the benefit of the community in general.
It may need a road widening to make a bend safer, extend a water supply as demand grows or a myriad of other necessary community improvements. Such uses, however, can have a substantial impact on the dispossessed land owner.
There are laws to ensure that the Government pays a market price for your land and pays fair compensation for the inconvenience and related losses as a consequence of the taking and the public work. Losses that will be compensated when land is taken may include such things as noise from increased traffic flows, or where land is cut into 2 portions.
There are some aspects of compensation that are somewhat subjective and even equally competent valuers can form differing opinions. So, how do you know that you are getting what is rightfully and legally yours?
A valuer with experience in this area understands what is fair and equitable and what can be reasonably achieved to ensure a full and proper compensation is received.
Even better still, the acquiring authority will often pay for the valuer of your choice! It is generally preferred to have at least 2 independent valuation opinions to ensure a balanced view and equitable outcome.
The key to compensation is that all losses suffered as a consequence of both the land taking and the public work, no matter how big or small, are paid for by the acquiring authority. At the end of the process, the dispossessed owner should not be out of pocket.
It is often a difficult time when property needs to divided, even when it is an amicable situation, but may be extreme when the affected parties have differing opinions or goals.
A valuer can provide impartial advice in these circumstances and is sensitive to the needs of what can often be a rather delicate situation.
When the Family Court or other Court are involved, a valuer is usually required to assist the Court as an expert and independent witness. A particularly high level of detail is required by the Courts to ensure that a full and proper view of the property is portrayed and understood.
The valuer’s task is to ensure that a fair and equitable price is placed on property that may be in dispute.
Many commercial rent agreements include a clause for a disputed rent review to be determined by a valuer appointed by the President of the API.
To be considered, a valuer must undertake specialist training for this role.
Again, the valuer must remain independent, listen to both sides of the argument and follow this up with their own market investigations. Either one or both parties may engage a valuer in support of their argument and the determining valuer will take these into consideration as evidence. There are a number of small pitfalls that can be made, so experience is essential.
As a lessee or a lessor, it can be quite prudent to seek independent advice from a valuer when you are considering a new lease, renegotiation of a current lease or a rent review.
Is your property fully covered? Have you allowed for cost escalations, clearing of the site and other related costs?
Losing your home may be a disaster, but not being able to replace it would be absolutely devastating!
Even though most insurance companies will index your level of cover, over time this may not accurately reflect the cost to rebuild.
Your valuer understands industry standards and requirements and will assist in ensuring that your property is insured at an appropriate level. They can also advise on other aspects you may need to consider under special circumstances.
Your valuer also understands how quality of finish, features and the like affect the replacement cost of your home, office or industrial building. All buildings are different in some small way and getting the assistance of a valuer could save substantial heartache if the unexpected disaster happens.
You might also want to check with your insurer whether there are any implications if you are under insured, that is, you are insured for a sum less than the reasonable cost to replace the insured buildings.
Property Based Government Revenue
There are a number of Government based revenues that are based on the value of your property.
These include Local Government rates, Stamp Duty, Land Tax, Capital Gains Tax and the GST Margin Scheme. You will also find that some Government payments are “means tested” which means that how much you receive may be affected by the value of property you own.
Taxation is inevitable, so, the real question is, “Are you paying a fair and equitable amount and are you getting the best possible outcome?” A valuer can assist in rating and taxing value objections and in the provision of values for the GST Margin Scheme and Capital Gains Tax. We can also provide advice on the value of means-tested property.
A valuer’s advice will ensure that a fair and equitable value forms the basis for revenue raised or payments made.