When you bought your home, the bank or lender behind your mortgage loan likely hired someone to perform an appraisal of the property. This appraisal is meant to identify the bank valuation of your property, or the amount of money that your lender should expect to get if they needed to sell your home. Occasionally, homeowners will consult this bank valuation figure when they decide to list their homes on the market. Between the bank appraisal number and recent selling prices for comparable homes nearby, these homeowners assume they have enough information to price their homes and put them up for sale.
The Flaw in the Plan: Why You Need a Professional House Appraisal in Burwood East
On paper, the plan outlined above sounds perfectly workable. Sure, you’d get a more accurate price by getting a professional house valuation in Burwood East. However, between the original bank valuation and recent sale prices of comparable home, you would probably figure out a fairly accurate ballpark value for your home. Right?
Not necessarily, and for several reasons. There are multiple flaws in the plan laid out in the first paragraph of this post. We will talk through all of them to explain why you should considering hiring Cooper Newman Real Estate to perform a professional house appraisal in Burwood East.
The first issue is time. The value of your home five years ago is never going to be the same as the value of your home today. Shifts in the housing market and the economy as a whole, as well as the steady rise of inflation, will have affected your home’s value significantly since you moved in. Even if nothing else about the home has changed, time will affect value.
The second reason to get a professional house valuation in Burwood East is less universal. Time impacts the value of all homes. Personal care, meanwhile, can vary in how it influences the value of your home. For instance, if you weren’t vigilant about maintaining and caring for your home, then it may have depreciated in both condition and value. On the other hand, if you took good care of your home and also made a few improvements while you lived there, then the value may have increased.
The Difference Between Bank Valuation and Market Valuation
Perhaps the most important thing to realise about home value is that a bank valuation is not the same as market valuation. Bank valuation is more conservative, seeking to identify how much the bank would be able to sell your home for if they had to liquidate the asset at a suboptimal time (e.g. during the wrong time of year or in the middle of a market slowdown). Market valuation, on the other hand, tends to reflect the sale price that an owner could expect if he or she sold the home at the right time. As such, market valuation is usually higher than bank valuation.
In other words, if you are pricing your home based on a bank valuation from five, 10, 15 or 20 years ago, you will almost certainly be undervaluing your home. And while consulting sale prices of comparable properties can help, the truth is that no home is exactly like yours. As such, if you want to get the best price for your home, you need to have a professional valuation appraisal done in Burwood East.
At Newman Cooper Real Estate, we are happy to perform your appraisal and determine the fair market valuation of your property. Call us on 03 9831 9831 to schedule your appraisal today.