2012 Autumn

Have you got what
you paid for? - Case of
Appraisal and Valuation
In most cases people rely on information provided by
Real Estate Agents when it comes to property values.
If you want to know how much your property
is worth, you would generally turn to your local Real
Estate Agent for a free appraisal. To most agents, a
valuation entails browsing a few real estate advertisements,
sales-recording websites and looking for other
seemingly alike properties that have recently sold to
gauge the value of your property. Sometimes, they
might even be based on an individual’s confidence
due to recent successful sales. And of course, these
figures vary from agent to agent. The fallout from one
of these free valuations can mean that if your property
is incorrectly valued and you suffer a loss relying on
incorrect information, the agent can walk away with
no, or very little, legal responsibility.
One the other hand, the more accurate method of
valuation is to adopt the market value of the property
as at the date of valuation, based on knowledge of the
property, market conditions, application of numerous
tools and techniques to analyse real figure pertaining
to the assigned property. Therefore, valuation must
be completed and signed by a qualified and registered
valuer, who has undertaken prescribed education and
training solely for the purpose of carrying out this
work.
In valuation, there are many methods that could be
used to value the property and they depend upon the
purposes of valuation. These methods are: market
comparison techniques; cost approach, income capitalisation
and hypothetical development approach. A
valuer, who masters these methods, analysing tools
and local knowledge, would then scrutinise figures,
making adjustments and using professional judgement
to adopt the true value of that property. Also, a
TRUONG VAN DO
Administration
Bachelor of Business & Commerce -
Property and Economics
valuation report produced contains many aspects pertaining
to the property such as location, access, legal
description, building improvements, easements, and
market overview and valuation rationale. The information
gives you many insights about the property.
With regards to the responsibility of the valuer: a registered
Property Valuer is legally bound and governed
by rules of conduct in their course of profession.
Therefore, the valuation report produced is done with
great care, integrity and high level of accuracy. The
first objective of the valuer is to ascertain the purpose
of the valuation in order to adopt a valuation method;
and sometimes one method is used a primary method
and another as a check method; for example: when
using the comparable sales method two properties
might be of similar values, but if one can consistently
earn a higher income for some obscure reason, then
a capitalisation method can be applied as a check
method, and may well raise the value of the higher
income producing property.
As an owner or investor, knowing the market value,
you are almost certain of how much you loose or gain
when deciding to buy or sell property. Also, valuation
reports are required legal documents for lending
institutions, government taxing agents, and courts
rulings when dealing with matters related to value of
property. Therefore, you should advise your valuer
the purpose for which you want to value the property.
There are many other purposes of valuation such as
insurance, probate, mortgage, refinance and for ascertaining
capital gains taxes.
At Tower and London, with 20 years of experience
in the local market, your valuation is completed by a
certified and experienced valuer.
Water Charges For Your Property
The subject of water charges is often a tricky
subject when dealing with rental properties. As a
landlord, you will generally pass on any usage bills
to the tenant to pay for the utility which they have
consumed. However when it comes to passing on
water charges, the answer is not so black and white.
In January 2011, the NSW government implemented
new legislation regarding to tenancy. Included in this
was information relating to passing on water charges.
Under the new legislation, a landlord can only pass
on water charges if the following criteria are met:
- the rental premises must be individually
metered
- the charges must not exceed the amount
billed for water usage by the water supplier
- the rental premises must meet required
water efficiency standards
In order to meet required water efficiency standards,
internal taps and showerheads must have a
maximum flow rate of 9 litres per minute.
JESSICA BRINCAT
Administration
BA (Media & Communications)
When purchasing water efficient fittings for your
property, please take note and look for items
labeled with the WELS (Water Efficiency Labelling
and Standards) rating. This will ensure you have a
certified product and will ensure that you are able
to pass on water charges. In order to ensure that
you can pass on your water charges, Sydney Water
advises that you keep a record of any receipts of
invoices for items bought, work done, or even
manuals and warranties to serve as proof of your
compliance with the legislation.
In areas such as Milsons Point, North Sydney and
Kirribilli, areas which are heavily populated with units
and apartment buildings, the above legislation will
only apply to a select amount of properties. If you
own a house or unit which is individually metered
you are able to claim the
water charges. However, as
is the case with most of the
properties we manage which
are not metered separately,
water charges are the
responsibility of the owner.
(Image supplied by Sydney Water)
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