What are the different types of property valuations, and what makes them important?
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There are many different types of property valuations, but knowing which one is best suited to your property can be confusing. In this short guide, we’ll help you navigate which type of valuation you might need and when you would need it.
Property valuation
The most common type of valuation and the one you’re likely most familiar with, a property valuation is designed to determine the value of your building. The value of your property depends on various factors, such as its location, size, condition, and several other factors.
House valuations are typically carried out by professional surveyors, and they’re designed to help you fully understand the value of your property. This is crucial for making certain decisions, like whether you want to sell or rent the property.
By having an accurate evaluation, you gain a clear understanding of what your home is worth on the market. That means you’re better equipped to deal with property market trends, calculate taxes, and find the best deal for your home.
Online valuation
While a full property valuation is essential in many situations, if you just need a rough idea of your home’s market value, you probably need an online valuation. Since an online valuation doesn’t need an in-person home inspection, you can save a lot of time and money by getting one instead of a full property valuation.
Typically, an online valuation is best suited to home buyers who are considering several properties, as this is an effective method of comparing similar properties in the same area. It gives you access to a rough estimate of most houses, letting you build a more cohesive idea of what a property in the area is actually worth, without requiring the larger investment of multiple individual property valuations.
Mortgage valuation
Once you’ve decided to buy a specific property, you may want to get a mortgage valuation. This type of valuation is typically an important step to get lenders to provide a suitable mortgage for your next property.
These are valuable because the qualified surveyor helps the lender work out a fair loan-to-value ratio, which will determine how much you can borrow and the mortgage rate you’re eligible for.
While the cost of a mortgage valuation can vary, your mortgage provider may offer a free valuation through their trusted provider. Of course, you’re not always guaranteed to see the report after the completed valuation.
Insurance valuation
Home insurance is a key aspect of home ownership, but for it to be useful, you’ll need an up-to-date valuation of the property. That’s because an insurance valuation ensures you have adequate coverage to protect your property.
If your home is incorrectly valued and an accident occurs, you may not receive a large enough payout to cover the repair of your property. On the other hand, if you’re paying too much, then this can damage your cash flow and ability to save money effectively.
Finally, having this valuation in place means you can provide detailed documentation to support a claim if you need one.
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