What is a sworn valuation?
A sworn valuation refers to an independent property analysis from a registered firm. Such a report requires the eye of an experienced and qualified professional who knows the ins and outs of real estate. There are multiple kinds of sworn valuation services in Queensland available that may prove beneficial to you.
A property valuation is more than just an inspection. The whole process involves meticulous calculations, an analysis of the market, and careful consideration of every factor that contributes towards the property's value.
Sworn property valuations are written in accordance with various regulatory and legislative requirements so as to avoid any complications down the line. The purpose of the report will also impact the way it’s written; courts and taxation officers, for example, will have more rigorous standards.
Whether you have a residential, commercial, or rural property, a sworn valuation may prove beneficial.
What is a sworn valuer?
A sworn valuer is the expert assigned to assess the worth of your property. Such valuers are registered with the Australian Property Institute and adhere to recognised international standards.
A sworn valuer, or registered property valuer, has undergone extensive training and education. Each possesses the necessary skill to prepare precise and detailed reports.
As property experts, they understand the different considerations affecting a subject property's value. They are uniquely qualified to examine each contributing factor. Through tried and tested methods, they reach a final value that can be relied upon.
Registered valuers tailor-make reports matching the specific circumstances of the client. All you need to do is consult with the relevant expert, and they’ll prepare a report in line with your exact needs.
How much does a sworn valuation cost?
There is no set sworn valuation cost. The cost of the report is largely dependent on the scale and purpose of the report.
When considering a service, a few different things may affect the cost of a sworn valuation:
- The size of the property
- The purpose of the report
- The scale of the report
- The complexity of the report
A commercial property report is likely to cost more than a residential valuation, as there are more factors at play influencing the value. More complex reports like retrospective valuations or industrial property valuations require vastly experienced specialists and may be more pricey.
The best way to get an idea of how much a valuation might cost is to request a custom quote.
You may be tempted by free valuations online or real estate appraisal services, but these do not hold the same degree of accuracy or legitimacy as a sworn valuation. Such valuations are not seen as certified and definitive reports.
Why get a sworn valuation?
Sworn valuations are beneficial in a wide range of different ways. A certified report can save on negotiation time, resolve disputes, and help you make the right financial decision.
Some of the many reasons people get sworn valuations are:
Pre-purchase/Pre-sale Advice
A sworn valuation gives you a clear idea of what your property is worth and therefore helps you make an informed financial decision going forward.
Settlement Negotiation Purposes
Knowing the definitive worth of a property can significantly speed up negotiation processes as both parties are getting an independent valuation from a registered expert.
Family Law Court
Family Law Court often involves cases of divorce, which requires a division of the assets. In such cases, having a monetary value attached to the property is vital.
Insurance Purposes
Valuations are often needed for maintenance and insurance purposes. When it comes to certain property types such as strata schemes, a valuation is needed to ensure that the strata building is adequately covered by the building insurance for the cost of replacement and reinstatement.
What methods do sworn valuers use?
Professionally registered valuers follow a combination of methodologies to reach a reliable monetary value. Experts choose a primary method to follow, and apply secondary methods to refine the final calculation. The most well-known of these methods are:
Direct Comparison Method
Valuers review similar properties sold in the area to get a base idea of how much the subject property is worth in the existing market conditions. They then make adjustments in accordance with the notable features and differences.
Cost Approach
Also known as the summation method, this involves an analysis of how much it would cost to build the property today. The value of the property is equal to the replacement cost, minus the depreciation, plus the land value.
Income Capitalisation Approach
A method used to assess commercial properties that involve an analysis of the annual income and expenses. The Net Operating Income is divided by the Capitalisation Rate to reach the value of the property.
Summary
Sworn valuations are an important part of understanding the value of a home. A job reserved for highly qualified professionals, such a service is highly accurate and serves as an official document. The purpose is to assign a numerical value to a subject property in line with market conditions.
Sworn valuers must hold all of the necessary qualifications and be registered with the Australian Property Institute (API). By following international standards and consistently refining their skills, they are able to prepare detailed and reliable reports.
The cost of a sworn valuation will depend on the scale and purpose of the report. Longer and more complex reports tend to cost more. Valuers follow industry benchmarks and apply best business practices to maintain a consistently high standard.
For more information on sworn valuations and their benefits, feel free to reach out to one of our team members.