SHOW NOTES AND TRANSCRIPTION
Hi there, and welcome to the property Gen podcast. Today we’re going to be talking to Jacqueline from the Sophie Fox Property Group. And we’re gonna be talking all about property evaluations. Welcome to the podcast today, Jacqueline.
Thanks back. It’s great to be here.
Yeah, we’re really excited to talk about this topic. So obviously, people know that a property needs to be or property has a value. But there’s a lot of conjecture out there as to how to buy your property, what evaluation even means. And I guess what’s the difference between a market appraisal and evaluation. So the first thing I’d like to discuss with yourself because I know you’re a licensed and registered value, is, what does it take or what’s required to become an actual property value.
So this is where it differs little from entry to be a real estate agent, or even a buyer’s agent, where you need to licensing costs in your state or territory. And that can be as little as four days. So it doesn’t require tertiary qualifications to become a real estate agent or buyer’s agent, sorry, with a value on it is a tertiary qualification. So it’s usually a four year degree at a university, followed by two years working as an assistant value of for someone more senior. And after that, you submit formal reports to the Australian Property Institute. And in Queensland, it’s the values registration board. And then you have to see to an interview with the panel of seek so there’s a number of steps to be evaluated. And I applaud that it is difficult to get into because you’re representing in many cases, banks, so large financial institutions, you’re the person on the ground, looking at property process and whether or not that when it goes to their credit team, whether or not there it should be red flags, that potentially someone’s paying too much for a property. And if they were to, maybe not, maybe don’t pay their mortgage, and it needs to be sold, whether or not the bank could actually get their money back.
That’s an interesting topic. Obviously, a lot of homeowners out there have had a bank valuation in the past and find that it’s often a little bit underwhelming. So what’s the difference between a bank valuation and private valuation? And why is it that typically bank valuations tend to come in a little bit lower than the problem else?
Look, it’s not as a value I, you don’t just say in your head are all be a bit lied on, because it’s for a bank. It’s not the process that you go for, you’re actually finding properties that have sold with similar attributes and your ranking, whether they similar whether they’re inferior, whether they’re superior based on the subject property that you valuing. So you are deciding whether something that sold a month ago or two months ago within about a kilometer of the property that you’re valuing, and you coming up with the pluses and minuses to work out what the true value is, of the property that you value. So it’s actually a little bit of a myth that bank valuations coming a little bit less, you know, they certainly conservative The bank has got to be able to any day of the week sell it for that price. But it’s also a pre purchase or a pre sale valuation is going to come in around a similar price people values don’t want to be exposed by inflating property values, because that’s what real estate auctions for they’re the ones that come in and sell the hopes and the dreams and will get you this and that because they’re not actually held accountable. They just do a price reduction when they get it wrong. When a value gets it wrong, they lose a license. Yeah, it’s um, it’s, it’s that’s why values are slightly more conservative than real estate agents. And that’s a good point. So and john explain a little bit about the difference between a property appraisal, which is generally done by real estate agent and a Property Valuation and their pals apart, Marcus, they’re not even in the same realm market appraisal, like I said, it’s just a real estate agent or a buyer’s agent even saying an opinion of value. So they might use other sales and say, x y Zed, so for this and your seats about here, so they might use the market, the market note local market knowledge, but it doesn’t necessarily require them to come up with actual evidence. So a valuer has to put together a six page report with actual evidence showing something that’s inferior, something that’s comparable, and something that’s superior. And they also have to do risk ratings as well. So saying things like, what’s the market doing? Say that, like, there’s so many different risk ratings? That is it in a flood zone and things like that a real estate agent doesn’t have to actually put in the, the big risk factors in what it might sell for?
Yeah, and I just want to some of the things that you might be looking out for the most people, I guess, wouldn’t necessarily be aware of do alter the property value.
So big one, for me is placement of the property. So you might say, Oh, it’s great. Great, I’m lovely wiki house on the photos and real estate.com. But the front, the back half of the block is actually very steep. So the topography is steep, unusable, and maybe plot affected. So it’s those sorts of things that it looks fancy on the real estate portals, but actually doing a little bit of overlay research, maybe it’s a bush fire zone, maybe it’s a character overlay, and you’re thinking I want to knock this over and build my dream house, but you actually can’t. So there’s so many different overlays and from the council that are important to study. And that’s what value is specializing
Yeah, I guess is the main main traps as well, sort of the roads, hallways and being often these things as well as power lines and
motorways noise noise harm.
Yeah. Anyone is telecommunications towns there. Yeah. Amazing where they sneak those things in these days. Okay, so should, if I’m selling a property, or if our listeners out there thinking about selling a property, should they get a property value done before they negotiate on a on a home or so if they’re buying a home before they negotiate?
Look, if you find that you follow the market and you feel fairly, have a high aptitude for researching can find on real estate.com in the sold section. These are other high three bedroom homes that have sold at this level. And you can have a fair enough idea in your own head of Where’s your yours might see then, by all means, use your own judgment. But its evaluation is really important for people that don’t have that they’re just a little bit nervous that they really don’t have that knowledge and they want the security of someone else’s opinion. That’s a professional.
Yeah. And how do you find? What about in the August property investment scope? Or spaces? Is that something where getting a valuation done? could be the difference between the guests. That property ultimately becoming I guess, a positive or negative good property? or?
Yeah, look, if you don’t live locally, or you don’t know the particular market you’re investing in, then it is a valuable thing to do is to get the valuation valuations, they’re not actually that expensive. If it’s a single one of those, sometimes they’re for 5500 550, depending on the area where you work. So it’s it is valuable in the scheme of a purchase, then, yeah, what’s 550? It’s the same as doing a building and pest if you think well, I don’t know, construction. I don’t know if the roof is in a in good Nick or not. Certainly the value that’s a pretty big component in all this you should employ an expert.
Yeah, and I guess being a buyer’s agent yourself, and obviously a Licensed Valuer. Do you evaluate all the properties that you buy for your clients? Prior?
Absolutely. it’s second nature for me to see what the moment I see the property address that I get on Have a look what the people purchased it for. And when they purchased it, and have they done renovations and this, why are they selling? Is it? Is it the first question I asked a real estate agent when I make that initial contact. You know, is it under duress is and I look to buy something else that I leaving the country. There’s so many different reasons and motivations and it is really important to know. So yeah, definitely.
Yeah. Okay. Well look, for the people listening out there who’d like to know a little bit more about Property Valuation, where can they find little bit more information and potentially get in contact with yourself, Jacqueline?
Well, the god recommends first protocol is doing a bit of reading online. So maybe jump on my website savvy folks.com that I you. I’ve got a number of blogs and information on there. And even the process is listed and even some fee so it really will help people just set first step into thinking what’s what’s really a buyer’s agent role. Yeah, I’d love to hear from anybody that has questions or
on a devaluation on their property. Fantastic. Well, look, thanks very much for joining us on today’s podcast and we hope you enjoyed today’s episode and we’ll see you in the next one on the property journal podcast. Thanks for listening.