Home buying tips

How to value a property

3 min read

Home buying tips

How to value a property

3 min read

Whether you're a vendor or a buyer, it's good to have an idea of how much a property is worth. Vendors will want to avoid over or under-pricing their home while buyers will want to know that a property is reasonably priced.

But how is a property's value assessed? How do you know whether that four-bedder in the suburbs is good value, or whether the vendor is dreaming?

The answer: a property valuation.

How to get a property valuation as a buyer or seller

When it comes to property valuation, you typically have three options. We spoke with buyer’s advocate Luke Moroney, owner of Search Party Property, to learn more about each.

1. Desktop valuation

The simplest way to establish a home's value is to check what similar properties in the same area have sold for – hence the name, “desktop valuation”. This can be done by you or an agent using a variety of online tools.

“An agent will use property data portals like Core Logic, Pricefinder or other research data to evaluate comparable sales,” says Luke.

Since these services are subscription-based, consider some of your own groundwork. A good place to start is by looking for places online close to the property in question, paying attention to features like:

  • size
  • condition
  • number of rooms
  • features like ducted heating
  • age, and
  • proximity to schools, shops, and transport.

A wide range of factors can influence sale price, though. These can range from minor aesthetic details, such as tile choice, to planning decisions, such as orientation of windows. And since no two houses are alike, comparing properties will only ever offer a rough guide to price.

“A desktop valuation is based on the numbers and web searches – that’s it,” adds Luke.

2. Speak to a real estate agent

Dealing with a lot of property sales and access to recent sales figures makes real estate agents a great source of information when it comes to valuations.

“Further research can be done by meeting with the agent during the inspection to get an idea on market prices,” says Luke.

There can be a big difference between what a real estate agent says a property is worth and the figure a formal valuation will come up with, though.

If buyers are looking at comparable sales figures from an agent in a hot market, they should have a buffer set aside in case there’s potential for a lower valuation.”

Just remember to get a valuation from multiple sources, as not all agents use the same methods, and some may estimate more conservatively.

3. Independent valuation

If you'd like a more precise idea of your home's value, consider getting in touch with a professional valuer. It may cost more than doing your own estimate, but accuracy is important when it comes to valuations.

Two types of independent valuations you can get from a professional are a:

  • kerbside valuation
  • full valuation

“A kerbside valuation would be a combination of a desktop valuation and looking at street appeal and what’s in the surrounding areas.

For a full valuation, the valuer is going into the property to see the nuts and bolts,” says Luke. A valuer will conduct their assessment based on a wide range of criteria, including:

  • location
  • condition of the house
  • size of the land
  • number of rooms
  • quality of fixtures and fittings
  • development potential, and
  • recent improvements such as renovations, landscaped gardens, or solar panels.

Suncorp Bank may get an independent valuation on a property before offering final approval of a home loan. This is a common consideration for most lenders during the approval process.

A valuation helps ensure a property makes good security for a loan. A bank will take into account things like flood and environmental issues plus maket conditions and then price.

Be as informed as possible

Whether you're buying or selling, arming yourself with as much info as possible is your best strategy for the campaign ahead. Use any or all of the methods above, and feel free to get multiple figures from multiple professionals.

Ultimately, the most important number is the one that someone will actually pay. Try to land on a figure that you consider fair, and don't be afraid to walk away if you think you're being ripped off.

Talk to a home lending expert

Published 14 July 2022

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