A property appraisal is a great way to find out what the local property market is doing at that point in time, and is an important step to understand your true net worth. Has your local property market fluctuated, have you recently renovated, are you interested in investing, are you looking to upsize or downsize? Or are you simply keen to find out what you are sitting on?

When you know the facts about the value of your most important asset you can make smarter decisions which more positively affect your current and future financial wellbeing.

There is no right time to sell a property – it really comes down to your own circumstances. But once you decide to sell, there are a number of things to consider, including:

• Choosing a real estate agent
• Finding how much your property is worth
• Picking a method of sale
• Setting a selling price
• Finalising the contract
• Agreeing on a marketing campaign
• Preparing your property for inspections
• Along with all the steps to complete the sale

Perhaps the most important element to consider from the list above is: how much is your property worth? Enter property appraisals. Conducted by a licensed real estate agent, an appraisal is a good way understand how much you could sell your property for in the current market.

Property size

When conducting a property appraisal, the real estate agent will look at the size of the overall block, the size of the structure on the land, as well as the size of the relevant areas within the home. For example, how large is the living area or main bedroom? The agent, however, has to weigh up these measurements against other properties in the area. It’s also crucial to understand the potential buyers or target market.

When looking at property size, the agent will also consider the outdoor areas – whether there is parking, and whether it’s a carport or lock-up garage, as well as the size of the garden and/or terrace/balcony.

Number of bedrooms

Bedrooms are a key element of the property appraisal process. Normally more bedrooms mean a higher market value. However when conducting an appraisal, the real estate agent will take into account the size of the bedrooms, whether they have an ensuite, built in wardrobes, views, etc.

When appraising your property, the agent will also look at similar properties that have recently sold with similar specifications as yours.

Fixtures and fittings

When it comes to fixtures and fittings, they’re not always sold with the property. Curtains, for example, do not necessarily need to be included. Neither do light fittings. When analysing the fixtures and fittings, the agent will firstly take into account whether they will be included in the sale price, and then if so, what condition they are in. While it may seem minor, a potential buyer walking into your property and looking at everything they have to fix may push the price down.

Areas for improvement

No property is perfect, but some imperfections are worse than others. When analysing a property for appraisal, the real estate agent will look at all the areas that need to be improved, or even just could be updated. In fact they are often a great person to ask where you should spend money on home improvements. They know what local buyers are looking for and what they value in a property. Whilst agents aren’t experts in this area, they can often give you some good guidance here.

It may be as simple as a quick paint or replacing the door handles. Other jobs may be a revamp of the kitchen or bathroom. However, it doesn’t necessarily need to be a whole renovation – simple fixes such as a new vanity or new lighting can make a world of difference to the price you achieve.

As with anything, you need to weigh up the cost of the fix against the possibility of a higher sale price.

Location

As the saying goes – location, location, location. When it comes to appraising a property, location matters.

When looking at the location, an agent will not only look at the street the property is in and the vicinity to local attractions, but they’ll also look at what school catchment the property is in, what amenities are nearby and what public transport routes are accessible. But remember, just because your property isn’t necessarily near anything, doesn’t mean it’s not going to attract a good price. Sometimes, the quieter streets and areas are just as desirable.

Building structure and condition

The stronger the building and the better condition the structure is, the more your property is likely to be worth. Let’s face it, any smart potential buyer is going to request a building report, and if there are cracks (figuratively and literally) they’ll show. Your property doesn’t need to be the fanciest or the most modern, but the better built, the better the price. The last thing most buyers want to do is structural work.

Overall presentation and fit out

Of course, nowadays, the overall presentation can generally be enhanced using a property stylist or rented furniture. While this comes at a cost, presentation is key when potential buyers walk through the door. And remember, you never get a second chance at a first impression, so you need to style to sell.

Listen to your agent if they suggest moving furniture around or taking some out completely. Your property needs to reel people in with exceptional presentation, but it also needs to leave some ideas to the imagination of the buyer; they need to picture themselves in your property.

Ease of access

The real estate agent completing the property appraisal will take into account the ease of access to the property. This relates to access to the front door, access for a car and even access to the utilities.

Some people may not care about walking up a couple of flights of stairs, others will loathe it. For this reason, ease of access may be a big thing when it comes to potential buyers, especially if you’re gearing your property to a young family or elderly people. The easier it is to access, the more desirable.

Planning and restrictions

Sometimes, when you’re selling a property you’re also selling the potential of a property. So, when appraising a property, a real estate agent is always going to look at what other vendors have done in your area in terms of building, and they’re going to look at whether there are restrictions on planning in the area, and for your particular block.

Local council zoning also may impact what a person can and can’t do with the block of land, and if there are a lot of restrictions, it may put people off.

Market conditions and recent local sales

There’s no denying that the condition of the market will generally dictate what your property is worth. An agent will look at the recent sales in the area and overall market trends to get an idea of what price to present to you as a guide.

However, while the market may indicate a lot when it comes to purchase price, it’s not the ‘be all and end all’. A potential buyer may walk through your front door and fall in love straight away.

Property valuation

A property valuation is usually performed by a Certified Practicing Valuer for an agreed fee. They are not real estate agents or associated with any real estate agency. Generally, valuers will use one of three methods to value your property: direct comparison, capitalisation or summation. They will inspect the property, carry out research and analysis into the local market and provide a detailed report regarding issues affecting the current market value of the property.

A property valuation service is commonly required by a bank or financial institution prior to approving a home loan. It is also used by buyers and sellers wanting an independent opinion prior to pre-purchase or pre-sale, family or partnership settlement, capital gains tax, and in some instances building insurance.

Property appraisal

An appraisal, on the other hand, is an educated judgement on what your home is worth. Not only will the agent look at all of the sales in the area, not just their own, but they’ll provide a unique insight into the local market. They specialise in your area after all. They also provide a figure based on insight into the features of your property.

Importantly, while the professional valuer’s figure is unbiased, the agent’s figure is generally indicative of interest in the suburb and it may even be influenced by conversations the agent has had with potential buyers in the area.

Lifestyle and family changes

Whether you’re starting a family, growing your family or facing an empty nest, your needs change. If you need more space and you’re looking for the next step, or you’re hoping to downsize because you don’t need the family home anymore, getting an appraisal ensures you understand what your property is currently worth. This means that you’re not relying on an old property appraisal, or guessing what it’s worth based on how much you paid for it and how much you overheard the place down the road sold for.

Location changes

Just because you loved a location when you first bought your property, doesn’t necessarily mean you love it now. Job changes, lifestyle changes and neighbourhood transformations can all influence whether you love or no longer like the area.

For example, while you may have appreciated inner-city living as 20-somethings, the lifestyle may not suit your kids. The same goes for those who no longer love living in the suburbs.

What’s important though, is knowing what your current property is worth so you can figure out what you can afford for the next. An appraisal will help.

Home improvements

Doing home improvements, whether big or small, are likely to influence the appraisal process. Whether it’s a paint job, replacing appliances, adding an extension or redoing the façade, many jobs that refurbish a property is a plus in the appraisal process. It also will likely add value to the home.

Any time you renovate, it’s a good idea to call in an agent for a fresh appraisal so you know what the property is worth with the updated work.

Financial changes

More money, less money – both are reasons to sell a property. For those earning more, it may be time to step up. For those who are retiring, it may be time to downsize. The changes in financial circumstances are a big reason many Australians decide to put their property on the market.

Of course, a fluctuating Australian dollar also impacts a person’s ability or need to sell. While financial changes may result in a limited ability to do the small or large improvements necessary to sell the property, getting an appraisal means you can understand what the property is worth in its current state. It allows you to weigh up the option of selling it as is, or holding on to the property for a little longer.