What Does A Property Valuation Report Look Like?

A property valuation report is usually requested for by a party who needs to know the true value of a property. The details contained in a valuation report can be needed for a number of reasons, including; trying to determine the price at which to sell or buy a property, securing a loan, calculating taxes, determining value of a mortgage, estate settlement, calculating insurance coverage, divorce settlement, determining ROI on property renovation and so on.

A property valuation report is usually requested for by the true owner of a property or by a financial institution who has a stake in the property question.

In a scenario such as applying for a home loan, a property valuation report will be necessary in order to properly ascertain the value of the property in question. If the property owner has not already hired an independent valuator to present a valuation report, the lender/bank will have their own valuator valuate the property and make available a valuation report.

Are there different types of property valuation reports?

Two broad types of valuation reports are generally available – Valuation Reports on Residential Properties and Valuation Reports on Commercial Properties.

Valuation reports on residential properties are done on properties that have been designed and built for the sole purpose of providing habitation. Such properties are usually located in residential neighbourhoods surrounded by other residential properties. Because a residential property’s primary purpose is to provide shelter, a valuator will focus on certain important aspects of the property to determine its suitability for habitation. Said aspects include the property’s comfortability, security, and safety.

Other factors that will influence a valuator’s report on a residential property include;

• Location: If the property’s location is suitable for residence and meets residential codes and regulations of the country.
• Room layout: The number of rooms and size of the rooms a residential property has plays a big role in influencing a property’s valuation report.
• Fittings: This will consider if a residential property has the minimal amount and types of fittings necessary to render it an adequate home. A sufficient amount of functional fittings will positively impact a report. Especially fittings that have to do with electricity supply ad heating.
• Age: The age of the building structure on a property will be calculated in order to determine a property’s value. Old buildings can contain harmful agents such as mould or wood rot. An old residential building that has such or similar elements that will be harmful to inhabitants will likely not be scored well in a report.
• Size: The size of a property and how many residents it can contain can greatly influence the outcome of a report.
• Wear and tear: the amount of wear and tear on a property will indicate its comfortability and safety which will in turn affect its value.
• Structural improvements: The valuation report will mention if any additions or subtractions have been made to a property to improve its comfortability and security.

What is contained in the valuation report of a commercial property?

A commercial property which is designed for more of a business than a residential purpose will have a report that has taken into consideration factors that are more pertinent to a commercial setting. That is, a commercial property’s design is primarily engineered in a manner that promotes productivity and/or profitability in a work setting, thus, elements that will be considered in a valuation report in this scenario will be different from those considered for a residential property.

But there will be elements that cut across residential and commercial properties during a valuation. Such as; property location, condition and size of the building, and such.

Elements unique to a commercial property include but are not limited to;

• Fit-out as well as internal and external aesthetics of the building (this will include ergonomics of the building).
• Availability and size of parking space for vehicles
• Garage access
• Local council zoning

The above elements and more will contribute to the conclusion reached in a valuation report concerning a commercial building.

What does a property valuation report contain?

A typical property valuation report, regardless of if it’s concerning a commercial or residential, will contain a summary of the following details.

• Title details: Details of the rightful owner of the property in question will be mentioned in the report.
• Address: This will detail the location of the property’s premises.
• Zoning: The zoning laws and regulations that apply to the property will be listed.
• Neighbourhood: The sort of neighbourhood the property is located in will be mentioned because it plays a big role in determining the property’s present and future value.
• Comparable properties: This will mention the property in question in comparison to neighbouring properties. This section will contain details about the subject property’s structure and compare it to the structure of neighbouring properties. It will also compare the estimated market value of neighbouring properties.
• Sales history: This will state any previous change of title that might have occurred concerning the property in question through buying and selling.
• Description of the premises: A description detailing aspects of the property will be included in the report. This will include any unique characteristics of the property.
• Building quality: This will mention the state of the building structure on the property
• Access to the site: Points of entry and exit to and from the property will be listed.
• Services accessible at the property’s site: The sort of services that are available in the property’s area and how well these services are provided will be mentioned.

Other important details that will be contained in the valuation report include; the construction standards of the building, if the building is designed for commercial or residential use (if residential, the accommodation type will be mentioned), and faults the building might have.

It is also important that a report contains coloured photographs taken during inspection of the property.

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