More than a single number

The main deliverable in a property valuation report is the single figure sum, or the price range, that a professional property valuer determines as fair market value. However, every professional property valuer will include quite a bit more information than this single figure in their reports. They'll give you an overview of the steps they took to reach their conclusion, as well as some guidelines on using and interpreting the information. Here's what you can expect to find in your upcoming property valuation report.

The legalities

These should be included on every formal property valuation, and include

• Registered proprietors / owners

• Legal description of the land and structures on it

• Zoning / resource management

• Statutory assessments, including rates

The locality

This description often includes demographic information about the region, its facilities and features.

General description of the property

Your property valuer's description of the house/land will include aspects that are relevant to its market value, and will generally ignore things that don't affect the ultimate price guide either way. For example, you may hate the fact that in your house you have to walk so far to get from the laundry to the washing machine; however potential buyers don't see things like this, so it won’t be included in a report.

Full description of improvements

Again, only the improvements that add significantly to the value of a house will usually be mentioned. For example, water saving showerheads are great, but rarely are people willing to pay more for a property solely on their basis!

Description of the approach used

There are three methods used by property valuation professionals. There is no single method that is more accurate than another - the method used will depend on the purpose of the valuation. The methods are:

• Sales approach

• Income appreciation approach

• Depreciated replacement cost approach

List of comparable sales

Professional property valuers will list the recent, comparable sales used in the estimation of value process.

General market comment

The state of the market currently will have even more of an impact on the value of a property than recent comparable sales or income appreciation. Real estate markets can do a lot of moving, even within 6 short months. This is quite an important part of your property valuation; it is also the part that you may find varies most between valuers, as it is more speculative than other data.

Will the house sell for the given valuation figure?

Unfortunately, property valuers don't own working crystal balls ... assumedly if they did, they'd all simply check the upcoming Tattslotto numbers and quit working! However, if your property sale satisfies various conditions that the report is based on, then yes, it should sell for the valued amount. These conditions are:

• Arm's length transaction

• Sale occurs after proper marketing

• Parties are acting knowledgeably, prudently and without compulsion

You should remember though that the property market can change fairly rapidly; and valuations are valid for the date they are performed on only. The closer to your valuation date the property is sold, the more accurate it will be.