Real Estate WA Buyers Get Pointers from REIWA’s Newly Released Guideline on How to Assess Property Values

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According to the Real Estate Institute of WA (REIWA), there are three options buyers can consider when getting property values and determining sale prices. The non-profit organisation for agents in Western Australia weighs in on some of the pros and cons of each option.

Real Estate Institute of Western Australia

If you solicit a property report from a company that deals with real estate data, make sure it can measure the current, improved value of the property and not rely simply on historical information.

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Property appraisal is more than just going to the actual open house and inspecting the property, inside and out. Buying a property commands careful consideration because it is, after all, one of the most significant purchases anyone can ever make. Add to that the fact that buying a home is an investment in itself. And determining high growth property values is a key element in ensuring a smart real estate investment. REIWA’s newly released guideline offers three potential means to come up with a reasonable way to assess property values.

The featured guideline provides a quick look at three possible ways buyers can arrive at getting property values. The Real Estate Institute of WA or REIWA lists down real estate agents, professional property valuers, and property reports as the three options real estate WA buyers might want to consider when they are seeking to get what it refers to as, “reasonable indication” of property values along with sale prices.

The recently released guideline points to professional property valuers as the optimal choice, reasoning that a professional valuer would be able to produce a more formal and authoritative report. According to the featured guideline, “These reports are based on sales information held at Landgate and from information obtained from real estate agents on recent sales not yet reflected on government data. Usually, these are the reports which banks and legal bodies will accept as valid for lending and legal purposes.”

Meanwhile, a property report may be acquired through private companies that collate information from Landgate, which are based on the previous sale price, and then adjust the data according to the prevailing condition in the overall real estate market. In contrast to a professional valuer’s report, REIWA finds that a property report could lack some of the more critical factors in determining property values as it is based on the “unimproved value of the property since its last transaction.”

What this means is that if a bungalow house, for instance, was bought off from the real estate Perth market a couple years back and renovations such as a new wraparound terrace and a pool were recently added to the property, a data-based report produced by a Sydney-based company might not be able to factor in such improvements — that will change the property’s value — unless it conducts an actual visit of the property.

REIWA’s property guide recommends, “If you solicit a property report from a company that deals with real estate data, make sure it can measure the current, improved value of the property and not rely simply on historical information.”

As for using the professional services of a real estate agent, REIWA notes that a property appraisal performed by agents is basically an “educated guess,” which means such an assessment may not be compelling enough to use as basis for making property investments. However, owing to the real estate agent’s local knowledge of an area, the property appraisal would still be an added help.

REIWA’s overall recommendation is that buyers (as well as sellers) would do well to rely on local services when professional, legal valuation of properties is required.

REIWA, which is deeply dedicated to promoting professionalism in the real estate industry, represents over 80 percent of operating agents in Western Australia, and has done so since 1918. Investors, buyers, and sellers looking to engage the services of real estate professionals for handling transactions in sale and rental properties, Perth market in particular, can make enquiries with REIWA agents today.

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