Council Valuations and E-Values on Houses – can you rely on them?
Often property buyers use rating Valuations (commonly called Council Valuations or Government Valuations) as a guide to value when making an offer or considering the purchase of a house. We have found there to be enormous inconsistencies in the assessments, which is bad enough when you see how it affects the relativity of rates collected on a property, however is an absolute trap for a lender basing any loan on a Council assessment of ‘value’ or a vendor/purchaser negotiating a contract for sale or purchase and relying on this ‘free’ assessment. Watch out for the following downfalls:
Council Valuations do not include a chattels allowance which would normally form part of a purchase price. Chattels generally include removable appliances, drapes, light fittings and floor coverings. The value of chattels can be as high as 10% of the property’s value.
Council Valuations are typically computer generated using previous values and increasing these by the average rise indicated by recent sales. These are then checked, sometimes by a roadside inspection. Very seldom do the Valuers make an internal inspection.
As there is often no internal inspection, a property may have been altered or refurbished since the Council Valuation was assessed and this would not reflect the property in its upgraded state. (or deteriorated state such as a leaky building).
Council Valuations are carried out every three years, and may be out of date after only a few months. Some assessments are carried out several months prior to the published date and may even be out of date by the time of public release. In most cases there is significant change to values in a three year period.
E-Value reports provided by Quotable Value are also a computer generated report where there is no actual property inspection and therefore very limited comprehension of what the property's attributes truly are. Our experience has found these reports to be misleading and as QV cannot guarantee any level of accuracy, anyone relying on such information would be most foolish given QV's own statement "QV accepts no liability or responsibility....".
In essence no property can be accurately assessed without a site visit by someone who is in full knowledge of the location's characteristics.