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A house with a sold sign in front of it, representing one scenario where a home valuation is recommended

When to Get a Valuation: Explaining scenarios where a valuation makes sense for homeowners

Knowing the value of your home can be incredibly useful in a variety of situations. Getting a professional house valuation done on your property ensures you have an accurate, up-to-date estimate that you can rely on. Here are some of the main scenarios where homeowners will want to get a valuation on their house:

Selling a House

One of the most common reasons to get your house valued is when you are looking to sell it. A valuation will tell you the current market value of your property so you can price it appropriately when listing it for sale. This prevents you from overpricing and missing out on buyers or under-pricing and losing money.

The valuation will analyse recent sold prices of comparable properties in your area along with current market trends. This data-driven approach produces an accurate estimate that you can use to guide your selling price.

Some key benefits of having a valuation done when selling include:

  • Setting a competitive listing price to maximize interest
  • Pricing appropriately for a quick sale if needed
  • Avoiding over or undervaluing based on emotions or attachment
  • Backing up your asking price during negotiations

So if you are even considering selling your house in the near future, getting a professional valuation is highly recommended.

Use a Qualified Valuer

When selling, it pays to use a reputable, certified valuer rather than going for the cheapest option. Paying a little more for an experienced valuer who is familiar with your local area can give you the peace of mind that your valuation is highly accurate.

This can save you money in the long run by avoiding pricing issues when you go to sell. The cost of the valuation itself is usually a very minor factor in the overall budget of selling a property.

Buying a House

Getting a valuation on a property you are considering buying is also important. This lets you determine if the asking price represents good value for money.

If the valuation is significantly lower than the asking price, it gives you evidence to negotiate the price down or walk away. You want to avoid overpaying if the vendor has their house overpriced.

However, if the valuation comes back higher than the asking price, it indicates you are getting a great deal. You can have confidence putting in an aggressive offer without the risk of overpaying if it is accepted.

Either way, having that independent valuation protects your interests as a buyer.

Some key benefits when buying include:

  • Establishing if asking price aligns with market value
  • Understanding the potential negotiation range
  • Giving evidence to negotiate a lower price
  • Identifying undervalued properties worth paying more for

For such a major purchase, investing in a valuation early in the process gives you invaluable information as a buyer.

Refinancing Your Mortgage

If you want to refinance your mortgage, a home valuation is often required by your lender. This allows them to ensure your property is adequate security on the new loan.

The lender will want to see the valuation is at least equal to or higher than your outstanding mortgage before approving you. A lower valuation means you have less equity available, increasing their risk.

Having this valuation done upfront prevents any surprises derailing the refinance later on. If the property valuation does come in too low, you have the option to cancel the refinance application before costs add up.

It also ensures you receive the maximum funds possible if doing a cash out refinance. You can borrow up to a percentage of your available equity, which is higher when the property valuation is higher.

Inheriting a Property

Receiving a property inheritance can be a highly complex process depending on the situation. Getting a valuation done on the property provides useful information to guide your decisions.

The valuation gives you a clear estimate of the property’s market worth. This helps assess whether to keep, rent out or sell the inherited property. It also provides a basis for determining fair splits between beneficiaries if needed.

Valuations also play an important role where probate regulations require selling an inherited property to repay outstanding debts. They ensure the sale price accurately reflects the property value as part of the estate.

Having that objective valuation early on allows all parties to make fully informed choices when dealing with a property inheritance. It removes some emotions from a highly charged situation.

Shared Property Settlements

Finally, valuations help facilitate fair property settlements after relationship breakdowns involving co-owned homes.

Rather than trying to determine the value themselves in a heated debate, divorcing couples can get an impartial professional valuation done. This gives a clear estimate of the property’s worth that both parties can use as a baseline.

From there the settlement details can be worked through more objectively. One party may agree to buy out the other’s share based on the valuation price. Or the property can be sold and proceeds divided accordingly.

Having that objective benchmark valuation reduces arguments and accusations during an already stressful process. Both parties can feel the overall settlement reached is fair and equitable.

The Takeaway

As demonstrated above, getting a home valuation done delivers significant benefits in a variety of common scenarios. The peace of mind and information gained from having an accurate, independent estimate of your property’s market worth makes valuations well worthwhile.

Rather than relying on guesswork or outdated information, a professional valuation gives you a solid basis for making major real estate decisions. Your valuer can also advise you on the best steps to take to maximize outcomes based on the current market.

So for key events like selling, buying, refinancing, inheriting or divorce settlements, be sure to invest in a quality valuation. The small upfront cost can end up saving you big time by enabling informed choices regarding your most valuable asset.