A property valuation report provides detailed information about the value of a property. Whether it’s for a residential or commercial property, a valuation report aims to determine the market value of the land and any improvements on it. Here’s what you can expect to find in a standard property valuation report.
The first thing a valuation report will indicate is the property’s overall market value. This is an estimate of the amount the property could feasibly sell for on the current market. A professional valuer will analyse recent sales of comparable properties in the area to determine the market value. Location, property type, size, condition and other factors are taken into consideration.
A valuation report will break the property value down into the value of the land itself and the value of any improvements on it. The land value is based on the property’s location and size without factoring in the buildings or structures built on it. Recent land sales of vacant lots in comparable areas are used to estimate the land value.
This section of the report estimates the value of any improvements on the land. For a residential property this includes the home itself as well as any garages, pools or other structures. For commercial property this covers the buildings, parking lots, landscaping and other improvements. The valuer will assess the size, materials, condition and depreciation of the improvements to determine their contribution to the overall property value.
In addition to the key valuations, the report will also contain other useful information. This may include the property’s legal description, zoning classification, assessment details and highest and best use analysis. An effective date, details of the inspection and the valuer’s certification will also typically be included.
Knowing what’s contained in a property valuation report helps ensure you understand the methodology and factors used to determine your property’s value. This allows you to better assess if the estimated value aligns with your own expectations.