If you are looking at selling, buying or refinancing a home, a property valuation helps to determine what your property is really worth.
Property valuations are an important part in the home loans process, but they can also be expensive. If you need a property valuation then there are various lenders which offer a valuation for free as part of the loan.
What is a property valuation?
A property valuation is when a qualified valuer assesses certain aspects of a property to determine a likely list price for it. A property valuation may be requested by a buyer, seller or lender. Property valuations from independent valuers and banks can cost you anywhere between $100-$600. Banks and lenders usually charge you between $100-$200 as a part of your home loan fees, but independent valuers usually charge upwards of $400. Some lenders waive the price of a property valuation which can save you a significant amount of money when considering a home loan.
There are certain factors which are used to help valuers determine the monetary value of a property.
- Location of the property
- Building structure and condition
- Standards of fixtures and fitting
- Square footage of the property
- Number of appliances
- Current market in your neighbourhood
- Home improvements, upgrades, repairs or extensions
- Planning restrictions and local council zoning
Property valuation vs market appraisal
Many people confuse property valuations and market appraisals, both of which are important in the process of selling or buying a house. A property valuation is performed on behalf of the lender and will usually be below market value, because it is used to determine the minimum price the house could be sold for in order to protect the lender. A market appraisal is performed by a real estate agent who is acting on behalf of the vendor. The estate agent is using the same factors to determine value but is looking to get the highest possible price for a property.
Read More: Market valuation vs bank valuation
Why do would you need a property valuation?
There are a few reasons why you may need a property valuation.
- Buying a home
If you are looking at purchasing a property then you may source an independent valuer in order to determine the value of the property. The report they will provide you with can give an insight into the good and bad aspects of the property and help you decide how much you should offer the sellers of the property.
- Selling a home
When you are selling your home it is important to understand what your property is worth. The value will help you determine the right listing price to attract potential buyers and help you to maximise your profits.
- Obtaining a loan
When you are trying to obtain or refinance a loan for a property your lender will organise a property valuation so they can determine the value of a loan. The lender also uses a property valuation to determine how much it would be able to sell the property for.
Who carries out property valuations?
Property valuations are carried out by banks, lenders or independent agents. When obtaining a loan a bank will prefer to use their own valuer to ensure their strict guidelines are met. If you choose to obtain your own property valuation from an independent valuer then the bank can still choose to perform their own valuation.
Which lenders offer free valuations?
Lenders that offer free valuations
At the time of writing, these are currently some of the lenders who offer free property valuations with specific loans.
- UBank The UBank variable rate and fixed rate home loans have no fees, which includes no fees for a property valuation.
- Illawarra Home Loans The Illawarra Bank Beater home loan is currently charging for property valuations.
- Newcastle Permanent The Newcastle Permanent Fixed Rate Home Loan charges you no fees, which includes property valuations.
- NAB NAB is currently waiving the property valuation fee for the Choice Package- Fixed Rate Home Loan and the National Choice Package Variable Rate Home Loan.
- Commonwealth Bank Commonwealth Bank's No Fee variable rate home loan carries no valuation fees.
- Bank of Queensland The Bank of Queensland's Clear Path Variable Rate Home Loan currently has a fee for property valuations.
- Citibank The Citibank Mortgage Plus home loan and the Fixed Rate home loan currently have no charge for a property valuation.
- RAMS The RAMS Low Rate Home Loan currently has no associated fees for property valuations.
What you should know about free valuations
It should be noted that with many loans which offer free valuations, this only covers the first valuation. If you need to get another valuation within the same loan for any reason, this often won't be covered.
Also, bear in mind that homes in regional areas might cost more to value as they may be more difficult for valuers to get to. In some cases, these homes may attract a valuation charge even if valuations are usually free to other borrowers.
A good quality valuation can make a big difference in the amount you can borrow, so if you have to pay for one, ensure you do your due diligence and choose a valuer with a proven track record.
Hi, we need an accurate valuation on a property that has no mortgage & have had two real estate agents come thru with wildly varying figures. We don’t know which one to believe and would prefer a precise and accurate value. Any suggestions?
Hi Kym,
Thanks for reaching out.
While we are unable to recommend a particular real estate agent, you may want to compare real estate agent proposals for free with Commingle on this page. Simply enter your details on the form and click “Enquire Now”.
Meanwhile, you may want to go through our guide on how to select the right real estate agent on this page.
I hope this has helped.
Cheers,
Liezl
I just want to get a valuation on a flat we own back in 1993. How do I get this information?
Hi Martin,
Thanks for your question.
You may want to get in touch with the Valuation Office in your state to get that information.
Cheers,
Anndy
Hello. When a bank gets a valuation done as part of the loan process is the purchaser/customer entitled to receive a copy of the valuation report? I know the bank tells you the valuation is for bank internal purposes only but can they legally withhold this information. I am particularly interested because the customer might need a copy of the valuation for tax purposes when they want to sell an investment property.
Cheers,
Cam.
Hi Cameron,
Thanks for your comment.
This depends on the lender but they usually do provide you a copy of the valuation, you’ll just need to request a copy directly with them.
Cheers,
Shirley