If you’ve ever tried to get a property valuation, you’ll know that it can be time-consuming and stressful.
And the experience can be devastating if your property is given a value that doesn’t match your expectations.
But an undervalued property might simply be a case of operator-error, according to property adviser Anna Porter of Suburbanite.
Property valuations are used for a number of reasons, but they’re most commonly needed so that lenders can determine how much money they’re willing to loan to a borrower.
For example, if a small business owner wants to get a loan from the bank, they’ll often use their home as collateral.
So, how a property is valued can have an enormous impact on the future of the borrower’s financial position.
While a property valuation can be out of the hands of the owner for the most part, Porter told Your Money Live there are a few things you can do to make you’ve gotten the right price.
While some mess around the house is unlikely to make much of an impact on a valuer, homeowners will want to make sure they’ve completed any renovation loose ends.
“If you’ve got half of a renovation done, that can obviously have quite an impact on what the property is worth,” Porter said.
Damage to the home or landscaping will also impact its overall value, so it’s important to finish any odd jobs that need fixing, such as peeling paint, broken walls or an overgrown garden.
“Often you’ll see properties where there’s been a lot of damage caused by pets, kids, life, and people just don’t get around to those little maintenance jobs,” she said.
Most of the time an undervalued property will have nothing to do with the property owner, and more to do with a mistake by the valuer, according to Porter.
“It’s an industry that has high turnover, [there’s] a lot of younger staff coming through because there’s a bit of a skills shortage in the industry, and sometimes we see the valuations aren’t always fair,” said Porter.
But for property owners that think they’ve been undervalued, there is a process that you can go through.
First, Porter says you’ll need to lodge a dispute directly to the lender or through a broker. But she warns – you must be able to provide solid evidence for your claim.
“Has the original valuation got critical flaws or anything wrong with it and what other evidence do you have that supports a higher figure?”
A common mistake made by valuers is that they’ve reported the land size incorrectly based on outdated data.
“The valuer may not have checked the mapping with council… they haven’t done that extra step of research around zoning,” she said.
If you do the research do find a critical flaw in your valuation, Porter said the valuer will have to review the case.
While valuers won’t always increase their price, if the case is strong enough, a lender might actually dismiss the report and assign a new valuer.
Full Article: https://www.yourmoney.com.au/real-estate/what-to-do-if-your-property-is-undervalued/