Getting your property valued can help determine its current market value if you plan to sell, leverage equity or refinance. Proper preparation is key to ensure you receive an accurate valuation. Here is a comprehensive guide to getting ready for a valuation in 2023.
Why Get a Property Valued
- Decide on an optimal listing price when selling
- Understand the current market value before buying more property
- Support loan applications for refinancing or a home equity line
- Calculate potential capital gains tax when selling investment property
- Split assets during a divorce or estate settlement
- Determine amounts for insurance coverage
- Substantiate property taxes or challenge an assessment
Types of Property Valuations
- Appraisal – Detailed inspection and analysis by a licensed appraiser. Required for mortgages.
- Broker Price Opinion (BPO) – Licensed real estate agent’s estimate based on comps.
- Automated Valuation Model (AVM) – Computer-generated value estimate like Zestimates.
- Assessed Value – Value determined by the municipal tax assessor’s office.
When to Get a Valuation
- Planning to sell within 12 months.
- Refinancing your mortgage.
- Taking out a home equity loan.
- Divorce proceedings involving property division.
- Insurance or substantiating value for a high-value property.
- Suspecting the municipal assessed value is inaccurate.
- Noticing significant value changes in the local market.
Preparing the Property
- Declutter inside and out to show space at its best.
- Clean thoroughly and make minor repairs.
- Stage key rooms like kitchens and bathrooms.
- Improve curb appeal with fresh paint, yardwork, lighting.
- Update outdated finishes like flooring or countertops if possible.
- Gather docs like floor plans, inspection reports, warranties.
- Inform all occupants to allow full access.
Preparing Relevant Documents
- Property deed and tax records
- Purchase and sale documents
- Prior appraisals or valuations
- Building plans, permits, certificates
- Renovation or improvement receipts
- Documents indicating property easements or restrictions
- All legal documentation indicating ownership
Following Up After the Valuation
- Ask questions about the valuation method, comps, adjustments etc.
- Request a copy of the full report including photos.
- Carefully review the details and calculations in the report.
- Notify the professional if you spot any factual errors or concerns.
- Use the detailed valuation as a benchmark for future reference.
Preparing thoroughly for a property valuation helps ensure you receive an accurate estimate of value based on the most current data available. This can inform important financial decisions when selling, borrowing against, or substantiating the value of your real estate assets.