How much do you know about property valuation?







What is valuation?

Valuation is the technique of estimation or determining the fair price or value of property. By valuation the present value of property is defined. The present value of property may be decided by its selling price.

The value of property depends on its structure, life, maintenance, location, ban interest and etc.


money properties,

Misconception of loan: 

Most of the people think that they are eligible to get 90% loan when they buy first and second property. But the fact is there are not everyone are eligible to secure 90% loan financing. Banks will base on the financial status of the borrower and value of the property to consider the borrower is requiring the 90% loan financing.
Even you having a impeccable financial report, your income is more than sufficient to cover the loan, you don’t have so many loan and you have one or more bank account with healthy cash flow. The bank must factor the value of the property into risk assessment.

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How does the bank factor the value of the property?

Banker require to appoint a valuer from its list of valuation panel to value the particular property and the banker will base on the report from the valuer to decide to grant loan up to 90% of the property value.
For example, you are entered into Sales and Purchases Agreement(SPA) to buy a property for the price of RM500,000. You apply to Bank A for loan so Bank A appoint one of its bank panel’s valuer to value the property and prepare a valuation report.

If the valuer value the property for the sum of RM450,000 and banker will base on the written valuation report, the purchases will obtain the loan up to 90% of RM450,000 not 90% of RM500,000.


How does valuer defining the Value of property?

The valuer will obtains the most recent transacted sales price from JPPH (Jabatan Penilaian dan Perkhidmatan Harta) and they make some necessary adjustments based on the condition of the property and value added from renovation (if any), for example the seller adding Marble Brick in the property will adding up the property’s value.
Therefore, properties in the same area located next to each other will not necessarily share the same value.
By using the example above, why the current market value is RM500,000 but the valuation report mentioned the property worth RM450,000 only?
One of the reason is JPPH only updates its sale transaction data every three to six months. While the property price may increase tremendously over the period of three to six months, the valuer has to rely on the sale transaction data which is not up to date with the latest market value.


The main factor will affect the price of the property is RENOVATION

But there are only few points would add value to property.
1, Auto gate system
2, Alarm system
3, Grills
4, Built in kitchen cabinet and wardrobe
5, Plaster ceiling
6, change of flooring,
7, permitted extension.

Some of the property would not add much value is because the renovation is hard to noticeable and poorly managed.


other reason
There are some other reason would affect property’s price

1, The location of property is more nearer of the city, the value of the property will be higher.
2, The property with high accessibility increases in value.
3, Proximity to facilities such as private hospital and international or private schools increases the value of properties.
4, The proximity of property to shopping malls, sports centre and restaurants will increase in value over time.
5, Properties with close proximity to sewerage systems, power stations and overhead power lines tend to be less valuable due to the risk factor associated.

There are still have a lot of knowledge about property investment that you can learn in my workshop.

You may click the link below to register my FREE workshop.

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