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.
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;
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;
The above elements and more will contribute to the conclusion reached in a valuation report concerning a commercial building.
A typical property valuation report, regardless of if it’s concerning a commercial or residential, will contain a summary of the following details.
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.