What is a Registered Valuation?

June 9, 2022

If you’re in the process of buying a home, you might have heard the term “Registered Valuation”. But what is it, and when do you need one?

A Registered Valuation is a professional assessment of a property’s market worth, conducted by a Registered Valuer. It involves a full inspection of the property, including council zoning maps and the sale price of other recently sold properties in the area. The Registered Valuer uses this information to determine the market value, which is an important factor when it comes to securing a home loan.

When do you need a Registered Valuation?

If you’re buying a new-build property, you’ll typically need a Registered Valuation. The house has never been valued because it’s the first time on the market. A Registered Valuation will help to determine whether the price you’re paying for the property is fair, and it will also give your lender the information they need to assess the property’s value.

Sometimes If you have a low deposit, you’ll need a valuation done. This is because the bank wants to reduce its risk by ensuring that the property is worth the price point. The banks want to make sure that they can recoup their investment if you can’t keep up with your payments.

Another situation where a Registered Valuation might be required is when you’re buying a house from family or friends or through a private sale. In this case, a Registered Valuation is often needed to assess the current value of the property.

So, how do you go about getting a Registered Valuation?

You can order one through your broker or bank. It needs to be done through the correct channels to be accepted. You don’t get to choose your valuer anymore – the process has changed recently to ensure that there’s no bias.

What is the cost?

The cost of a Registered Valuation typically ranges from around $1000, with an additional cost of $250 if you need it done urgently. This is a conditional cost that is covered by you, but it’s not too expensive to do so.

If the Registered Valuation comes back higher than what you bought the property for, it’s a bonus for you. However, if it comes back lower, that’s when it can become an issue. The bank will only lend you the loan percentage they have approved you on. For example, if you have been approved for a 90% loan, they will only loan you 90% of what the Valuation came back at. It’s important to be aware of this, as it could affect your ability to secure a home loan.

It’s best to expect that your new home will need a Registered Valuation, and to ensure you have enough time to get one done. By doing so, you can have peace of mind knowing that the property is worth what you’re paying for it. It can also help to reduce the bank’s risk. If you’re a first home buyer or have questions about the buying process, chat to the SM Property team today! For more tips and tricks on the home buying process, head to our Instagram page!

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