Buying a new place is a serious investment, which is why you should have a clear idea of a property’s value to prevent any financial missteps. A valuation can help you with this.
A valuation is an on-site analysis of a property, giving you a realistic expectation of what to expect as a buyer.
Unlike home appraisals, property valuations are reliable and have legal standing. They contain information about the property’s age, layout, and many other crucial details. This data acts as a powerful resource in the buying process, especially during negotiation, mediation, and mortgage approval.
Here are some critical reasons why you need a pre-purchase property valuation to streamline the acquisition of your future home.
1. To Get Mortgage Approval
The most apparent reason to get a pre-purchase property evaluation is for mortgage approval.
Most homebuyers harbor the misconception that mortgages are based on a property’s “list” or purchase value. However, this is not the case. Lenders request a valuer to determine the “market” or accurate value of the property. Then, based on that number, they qualify or disqualify b for a mortgage product.
If a lender believes the valuation is biased or misleading, it could put your mortgage application in jeopardy. In the worst-case scenario, you might even be charged with mortgage fraud. That’s why it’s in your best interests to arrange a professional valuer for the job.
Lenders hold valuers to very high levels of scrutiny. That is why a valuation report is exceptionally detailed. Here’s a rundown of things it may cover. Us this list to get an idea of how mortgage qualification is determined:
- Size and shape of the property
- Developmental potential
- Topography of the land
- Photographs of structural defects and inefficiencies.
- Type of rooms and fix
- Property’s age, layout, and its fixtures and settings
Valuers have to adhere to specific guidelines set by the lender. For example, they may treat the property as a single residence even if it has potential as a triplex. Ensure you show up for the valuer’s visit to understand the nitty-gritty of property valuations and clear any doubts or confusion.
2. To Have Negotiation Leverage and Peace of Mind
A property valuation may reveal issues that impact the selling value of the property.
For example, the valuation report may conclude that the property is overpriced for its age. Having information like this will give you bargaining power at the negotiation table. Coming from a position of authority, you can ask the seller to lower the property’s price based on the valuation findings.
With a valuation, you’ll also have the peace of mind that you’re not wasting your time on an unattainable property. This will set realistic expectations and help you work within the boundaries of your budget.
Furthermore, a valuation is a legally binding report and so can help you defend your position in disputes with the seller.
3. To Get a Neutral Opinion.
As a potential homeowner, you may become emotionally attached to a property. This could cloud your judgment and steer you away from the cold hard facts of the sale.
A professional valuation can give you a clear idea of where you stand and what you need to do to better approach the sale.
Real estate agents have a vested interest in the property. Therefore, their opinion is not always objective. On the other hand, a professional valuer shares no conflict of interest and wants more than just getting the best offer from a buyer.
It is important to get a qualified property valuer who will give you an accurate and honest valuation with any conflict of interest.
4. To Incentivize the Seller to Make the Property More Livable.
Before a property valuation, a seller makes upgrades and improvements to get the best valuation for their real estate. Some examples include tidying up the yard, repairing broken windows, and de-cluttering the interiors. This indirectly benefits you, allowing you to better navigate and picture your belongings inside the property on a showing.
Sometimes, property valuations also precede a rigorous home inspection process. Homeowners try to ensure that there aren’t any major structural flaws or defects in their property that may tick valuer off. This saves you from the hassle of paying a home inspector and makes you more assured of a property’s condition and potential longevity.
Property valuations make a world of difference in the buying process, playing an integral role in assessing the accurate value of your future residence. For best results, acquire the services of a professional and trusted valuer.
Look for someone active in the local market – someone who has a proven track record of valuations. Also, make sure you show up on valuation day and have some questions prepared for the valuer to understand your role in the process better. The more effort you put into the valuation process, the better your chances of bargaining a good offer for your dream property.
Article Submitted By Community Writer