A Guide to Property Valuations

What is a Property Valuation?

A property valuation is often conducted by a qualified and certified valuer on the request of a lender/credit provider who is looking to fund the purchase of a property. The valuation can also be requested by you (if required).

Why do Lenders require a Property Valuation?

It is an essential part of the home loan application process and is usually performed by when lenders are in the process of financing a property. The lender/credit provider will usually use their own nominated panel or preferred licensed property valuers.

Property valuation is requested for number of reasons, such as:

To assist in the calculation of the Loan-to-Value Ratio (LVR)

Develop an opinion of the market value of the property

Assess the value of land, buildings, improvements and other factors that influence the current and past value of your property (i.e. the process involves both external and internal inspection of the property)

What Information is available in Property Valuation Reports?

Property valuation reports will include the following relevant property information details:

Executive Summary – which is a summary of the report itself showing who ordered the report and who the owner of the property is to be

Land Details – such as dimensions and area

Title Particulars – shows the Title volume and folio numbers and any other encumbrances registered on Title

Topography – a description of the land and the area

Services – what infrastructure is available e.g. water, electricity, sewerage

Town Planning – the Zoning of the property and if the buildings conform to that zoning

Planning Constraints – whether the property has any Council planning constraints

Environmental – if any environmental issues are in evidence

Location – describes where the property is in relation to CBD’s and other suburbs

Improvements, which include:

Dwelling Description – a brief statement of the dwelling

Construction – describes the materials used e.g. brick and tile

Accommodation – the number of rooms and the type of rooms within the building

PC Items – covers the kitchen, bathrooms, laundry

Fixtures& Features –describes such items as the air conditioning, ceiling fans and floor type, etc.

Other Improvements – will show a swimming pool (if installed), and fencing

Building Areas – shown in square meters the living, outdoor and garage areas

Condition

Photographs of Improvements – photos of the building in and outside

Comparable Sales – shows the recent sale of other properties in the same area

Sales Evidence – lists the address, sale price and date of sale

Risk Analysis – shows the property risk and marker risk ratings on a scale of 1-5 with 1= low risk and 5=high risk

Comments – Valuers overall assessment of the property

Valuation Approach

Remember that several factors constitute the property valuation report. If you keep in mind the factors mentioned in this guidebook, it will enable you in choosing the right property.

Are you considering buying a property? If you are looking for finance, the Team at Finance Me will help you in your Home Loan journey. Enquire online now.

Understanding Different Types of Land Titles in Australia

What is Land Title?

Each state and territory has a central register of all the land in the respective state and territory which, shows the owner of the land. Each state and territory Land Titles Registers provide search facilities.

A Land Title can be best defined as being:

the right of ownership of property, or

the documents constituting evidence of that ownership

What are the Most Common Title Ownerships?

Here is a list of the most common title ownerships you can encounter in Australia. The list may help when you are deciding which Title applies to any property you are interested in and which Title you may require:

Torrens Title (also known as Freehold Title), and

Strata Title

Other Title ownerships you may encounter are Leasehold Title and Company Title.

What is a Torrens/Freehold Title?

Torrens Title is a modern simplified system of land ownership showing title to the land through a document called the Certificate of Title. This document is registered at a central registry (i.e. the government’s Land Titles Office). The original Certificates of Title remain in the register, and the duplicates are held by the following parties:

The Owner

The Registered Proprietor, Or

The Mortgagee (i.e. the lender/credit provider)

Interestingly, the greatest number of properties in Australia fall under the Torrens Title system as this system covers almost all Residential Title and most Commercial Titles.

What is a Strata Title?

Strata Titles form part of what can be called Strata Plan Developments and these Titles are commonly found in the following buildings because, a Strata Title allows for parts of the building (referred to as “Lots”) to be owned by different owners:

for Home Units/Apartments, and

for Townhouses

What are the Most Common Strata Plan Developments?

Here is a list of developments that can exist under a Strata Plan:

Residential

Commercial

Retail

Mixed use (i.e. retail and/or commercial and/or residential)

Serviced Apartments

Retirement Villages

Caravan Parks, and

Resorts

What is Common Property?

Any part of a building in a Strata Plan Development that does not form part of the Home Unit/Apartment or Townhouse forms the Common Property. The Common Property can consist of any of the following areas:

Roads, Driveways, Pathways, Fences and Gardens

External Common Walls and Roof

Stairways and Entrance Halls

Meeting Room, and

Recreational Facilities (e.g. Tennis Court, Golf Course, Swimming Pool, Gym, Sauna, etc.)

What is the Responsibility of a Strata Owner?

Common Properties are owned by all strata “owners” in proportion to their unit entitlements. The Common Properties are managed by the Body Corporate or Strata Company, and each owner is responsible for the Common Property and will share in the cost of upkeep and maintenance of the Common Property areas.

How is a Torrens Titled Lot different to a Strata Titled Lot?

Here is a list of differences between a Torrens Titled Lot and a Strata Title Lot:

Torrens Titled Lots are:

Created under the Transfer of Land Act 1893, and

The Transfer of Land Act does not allow for implied easements

Strata Titled Lots are:

Created under the Strata Act 1985

The Strata Titles Act allows for sharing of access to services and maintenance of such services (i.e. water, sewerage and electricity), and

These services can pass through Common Property and other lots in the Strata Development Scheme

Are there any Common Features between a Torrens Title and a Strata Title?

Yes, there are some common features, such as:

A Strata Title is as secure as a Torrens Title

Both Titles can be bought, sold and mortgaged, and

Both Titles have permanent tenure

What is a Leasehold Title?

Interestingly:

Leasehold is the method utilised over government properties held in rural areas (e.g. the large cattle or wheat properties that are held under long-term or perpetual lease, and

At times, the state governments may decide to subdivide and release the above rural properties if the area became desirable for residential development

All land is held under “Leasehold” in the Australian Capital Territory (ACT), and

Some old church properties, Island Resorts are also tenanted as “Leasehold”.

What is a Company Title?

There is little known about this type of title amongst the general public. The little information known is that:

Company Titles originated almost a century ago but may still be present in some areas, and

In a Company Title, a company will be the owner of the company complex.

What Title Tenures Apply to Retirement Villages?

There are a number of very good Retirement Villages offering different types of tenures. However, the most common Titles in Retirement Villages are:

Freehold Titles, and

Strata Titles

So, now that you have read about Land Titles, I hope you have a good understanding about different types of Title Ownerships. However, it is always wise to seek expert legal advice if you still require further information on Title Ownership and what Title applies to your desired residence.

Now that you know about the Land Titles that can apply to any property you are interested in, make a quick property purchase and an approval with Finance Me – The Finance Experts.

Debt – Taking Control of your Financial Situation

Tips on Debt Solutions Available in Australia

Debt can be a winding cycle that people ignore until the situation becomes worse. If you are in debt, you need to find a solution as soon as you can. Managing debt effectively involves paying off debts regularly to preserve your credit rating and get your finance back on track.

Income and Expenses

One of the crucial steps that will begin your journey towards freedom from debt is to list down your monthly expenditure and categorizing that according to necessities and non-essentials. Use your budget to create columns for your expenses and income. The ideal situation is for your income to exceed your expenses.

Use Cash

Avoid using your credit card by adopting the habit of using cash to pay for your purchases. This will limit your spending to the cash that you actually have. Save all your extra money and set aside a savings account for it to pay off your loans.

Reduce Expenses

Reducing your expenditure regularly will enable you to have more money for this type of fund and get out of debt faster. Think about the expenses that you do not need because the goal is to reduce your expenses and channel more money towards paying off your debts.

Increase Income

If you are unable to lower expenses, you will have to earn more income. Whether you need an extra source of income such as working part-time or starting a business, more income will be necessary. Extra income can be used to pay off debts.

Consistency

Aim for consistency within your budget and set a target that will determine how much you pay every month regardless of your circumstances.

Recommended approaches for paying off credit card debt include paying off smaller debts or high interest loans first. The goal is to lower balances and speed up the process of eliminating debt.

You can seek a debt consolidation loan. By lowering your debts and you continue to make the same payments each month you will pay these debts off quicker. If you pay off one debt, move on to the next creditor and continue making your regular payments.

Savings

While paying off debts, remember to keep saving money. If you encounter an emergency without adequate savings, you may end up further in debt. This would be a major setback that you can avoid by making sure that you have a savings account.

Contact Professionals

If you need professional assistance, you can research on different debt solutions and programs to gain insight into how they can help you. If you have lenders who are unwilling to negotiate and you are overwhelmed by debt, finance professionals can help you overcome the problem. Contact a reputable company that offers solutions such as debt settlement and debt consolidation.

Consultants and experts negotiate with lenders to reduce rates and debt amounts. They can settle, renegotiate and adjust your debt terms with creditors. This includes lowering the balance, reducing amount owed and interest rates. Choose a solution or program according to the terms and how much you will be able to save.