Property Valuation Guide – How Much Is Your Property Really Worth?

If you’re planning to sell your property soon, then you’re going to need to find out how much it’s really worth, yes?

You know how much you paid for your home, and most likely you’ll probably factor all the work you’ve done and the memories you’ve made there into your idea of what it’s worth.

But while your home may be your castle, your personal feelings toward the property and even how much you paid for it a few years ago play no part in the value of your home today.

That’s why the first thing you need to do before selling your home is to do a property valuation and if you want to know more, do read on.

Want to get a property valuation and help to sell your property? Click here for a FREE consultation.

What is a property valuation?

Simply put, a property valuation is an estimate of the fair market value of a property, whether it’s an HDB, private condo, landed unit, or commercial property. This is very important as this serves as a benchmark, that buyers and sellers use to negotiate their desired price of the property

Why should you know the value of your property?

As you know, a good valuation report, coupled with a complete list of the market value of similar properties transacted in your area, will act as a tool that will help you in negotiating the property’s price with potential buyers, but there are actually more than meets the eye.

In fact, here are some of the other advantages of a valuation report that you probably don’t know:

1. Helps in getting funds

As a standard industry practice, financial institutions such as banks usually require a valuation report before anyone can obtain a mortgage or housing loan. This is because this document will be used as a reference to determine how much they can lend.

For individuals who want to buy their first property in Singapore, you can only get a loan-to-value (LTV) ratio of between 55% to 75 %, according to the new ‘cooling measures’ announced on 6 July 2018. So for example, if the property costs $1M, the loan quantum you will get at the end is only between $550,000 to $750,000.

2. Smoother negotiations

By having an indicative property valuation on the negotiating table, it’s easier for both parties (the buyer and the seller) to meet a desired price

3. Protects interest of buyer and seller

Because of the property valuation, sellers are less likely to sell their property at an unfavourably low price, while buyers are actually protected from spending too much on a property.

What actually determines your property valuation?

1. Indicative Valuation

The Indicative valuation is an estimate of your property’s worth provided by respective banks or valuers., you can derive this valuation by averaging the selling prices within your current condo and similar surrounding properties of a similar size and floor level.

It is mostly done by asking your bankers and looking at the latest transaction records. However, do bear in mind that the valuation serves only as a guide whether you are a buyer or seller.

An easier way to do this is to go to property portals such as SRX, PropertyGuru and 99.co, as these sites usually have a free valuation tool and a database of the latest transactions. You can also consult a licensed property agent, who is familiar with your area to give you a free estimate on the value of your home.

2. Actual Valuation Report

Unlike indicative valuation, actual valuation is more detailed and accurate as it is carried out by professionals like valuers, who are paid to assess a property’s valuation based on the following:

Property’s address

Is your property situated in a secluded place or in a prime area? Prime means that your property is strategically located close to amenities, public transport nodes and major roads. Such properties also attract significant consumer traffic.

Zoning

What is the intended use of your property according to the Urban Redevelopment Authority? Is it zoned for residential or commercial? Take note that some properties have mixed usage like shops/F&B on the first level and residential on the second floor onwards.

Land area, number of rooms, & built-up space

Typically, larger properties command higher prices. However, there are a number of cases, where smaller properties like shoebox units actually fetch higher PSF prices than bigger ones. Some investors also typically prefer units with more rooms for rental.

Building age & state

Generally, new properties with modern specs like smart home functions are more expensive than older properties. However, the former is also more in demand due to easier maintenance. If you’re buying a property in the hope of selling it for a handsome profit, we advise that you will keep it in good condition as poorly maintained properties usually fetch a lower price and are not easy to sell.

Once a valuer finishes his/her job, you will receive a comprehensive valuation report that describes your property’s land area, status, and structure along with the market price.

How does one receive an HDB or private condo valuation report?

For HDB homeowners, you do not need to worry about the valuation cost since you can get a report on your unit from Housing & Development Board (HDB). The HDB valution report is only provided after the seller and buyer have confirmed on an agreed price. The option to purchase document is then submitted onto the HDB website within 24 hours. An actual valuation from HDB will come back within 5-7 working days.

Do refer to the full process on the HDB website
https://services2.hdb.gov.sg/webapp/BB31ERESALE3/BB31SMain

For private property owners, you can always engage licensed appraisers who are members of the Singapore Institute of Surveyors and Valuers which is a paid service. Another option is to hire licensed real estate agents like us for assistance.

Conclusion

One of the riskiest things a seller or buyer can do when selling/buying a property is to determine the value of a home by relying on forums, flyers or hearsay without doing proper research or engaging with a professional.

So if you need help coming up with an accurate valuation of your home, drop us a message and we’ll be more than happy to help!