EXPERT CONTRIBUTOR · 7 MIN READ
Is a pre-sale valuation actually worth it?
We put fourteen questions to a registered valuer about what a pre-sale valuation costs, what it protects you from, and when you should not bother paying for one.
The short version
A pre-sale valuation costs about the same as a building and pest inspection and does two jobs. It gives you an independent price to campaign against instead of a hopeful one, and it gives you a document to put in front of a bank valuer when theirs comes in short. The one case where it is a waste of money is a house that is genuinely interchangeable with several recent sales on the same street.
Key takeaways
- Around $500 to $600, which is less than a building and pest inspection.
- What it protects is not the listing price. It is the sale surviving the finance clause four weeks in.
- A view can be worth $250,000 to $300,000 and no database has a field for it.
- The site value on your rates notice is routinely 30 to 40 per cent under market. It is a rates calculation, not an appraisal.
- Another valuer will move for a peer’s report with sales attached. They will not move for a seller’s opinion.
Craig Smith is the director of Australian Valuers, an independent valuation firm he has run since 2008, working across South East Queensland from a head office in Maroochydore. His valuers are members of the Australian Property Institute and registered with the Queensland Valuers Registration Board.
We asked him to make the case against his own service first, and then for it. This is the conversation, lightly edited for length.
Why pay for a number the portals give away
“In a built-up area where there is a lot of available sales evidence and properties are turning over all the time, I have found them to be pretty good. They are probably getting better.
“But the minute it is outside the box, they are just not reliable at all.”
Craig Smith, Registered Valuer, Australian ValuersThat is a more generous answer than we expected from someone with no commercial interest in flattering them. Outside the box is the phrase that matters. It means acreage. It means coastal. It means anything where the value sits in something a database has never recorded.
What a model cannot see from a desk
“You could be within the same street. One side of the street has ocean views and the other does not. A view could be $250,000 to $300,000 more in value.”
Craig Smith, Registered Valuer, Australian ValuersA model looking at that street sees two houses of similar age, similar land size and similar bedroom count, a few doors apart. It has no field for the fact that one of them looks at the water and the other looks at a fence. So it splits the difference, and it is wrong by a quarter of a million dollars on both of them.
“Being a valuer on the Sunshine Coast or the Gold Coast is pretty difficult. You need eyes on everything, because there are different aspects, elevations, water views. There are so many things to consider. That is why it is so difficult to just desktop things.”
Craig Smith, Registered Valuer, Australian ValuersSuburb names hide a lot, too. Craig points out that a place like Buderim is effectively five or six suburbs wearing one name, so comparable sales inside the same postcode can come from a completely different market.
Where your number actually comes from
“Everything is based on factual, settled sales evidence.”
Craig Smith, Registered Valuer, Australian ValuersNot asking prices. Not what the neighbour reckons. Settled sales, which is a narrower input than most sellers assume.
Does a cooling market change how you read old sales
“If I am using sales that are six months old, I know full well that if that property gets listed tomorrow and sold in two months time, I would be very surprised if it is going to get the same value. So yes, we do have regard to where the market is.
“It works the other way too. When it was running hot, sales were telling me a property was worth a million, but I am trying to give pre-sale advice to someone. I have got to be realistic. It is probably 1.05 or 1.1, because the market has moved since then.”
Craig Smith, Registered Valuer, Australian ValuersThat judgement is what a seller is actually paying for, and it is the thing an automated model cannot apply. In a falling market, sales evidence from autumn flatters a spring campaign. Anything that quietly leans on six month old comparables and calls it today’s value is doing the seller no favours.
What about the council valuation in the contract
“That council valuation is a totally different methodology. It is a totally different assessment.
“You want your site value on your rates notice as low as possible, because that is one of the main things they use to calculate your annual rates. It is not really reflective of what the site is worth anyway. It is often 30 to 40 per cent under.”
Craig Smith, Registered Valuer, Australian ValuersSo if a buyer opens with but the council says it is worth this, they are quoting a tax input, not a market appraisal. Worth knowing before you concede anything to it.
Why call it an insurance policy
“Having a pre-sale valuation in the top drawer is like an insurance policy. It can be used in negotiations if needed. It does not always have to be. But if push comes to shove, you can pull it out.”
Craig Smith, Registered Valuer, Australian ValuersThe clearest illustration is one that happened to Craig personally, as a buyer.
“They sent a valuer up from Brisbane, a larger firm. They came past the property and did not realise it had views. They were not local, so they were not aware. They were comparing the top of Buderim to other areas of Buderim, and as a result they came in well under market.
“I queried it and got hold of the valuation that had been done and sent it to them. They changed it within a matter of seconds.”
Craig Smith, Registered Valuer, Australian ValuersBen’s insight: that is the whole argument in one story. The valuation did not win him a better price. It stopped somebody else’s mistake from costing him the deal.
What happens when the bank valuation lands short
“We have not had too many dramas, especially in a local agent, local buyer situation. Very rarely is it deemed that the price is too high.
“Getting finance is extraordinarily difficult though. We are seeing a lot more extensions on contracts these days, because it is taking the banks so long. They seem to do a lot more checks and sit on things for a lot longer.”
Craig Smith, Registered Valuer, Australian Valuers“You might be able to sell your property for more than it is worth, but if it is subject to finance, it is going to come unstuck at the end anyway. So why not establish that now?”
Craig Smith, Registered Valuer, Australian ValuersThis is the part sellers underestimate. If a bank valuation lands under the contract price, the buyer finds the shortfall in cash or the deal dies, usually four or five weeks in, at which point you relist as a property that has already failed once. The market reads that and prices it in.
What actually changes another valuer’s mind
“From a valuer’s point of view, if you are given another peer’s report with sales and everything, it is taken a lot more seriously than someone just saying you are too low or you are too high.”
Craig Smith, Registered Valuer, Australian ValuersA seller with an opinion gets nowhere. A seller with a registered valuer’s report and the sales evidence behind it gets the number reviewed. That is the mechanism, and it only exists if the report was commissioned before you needed it.
What does a pre-sale valuation cost
“For the cost of it, probably less than a building and pest, you are getting some really good quality information in that report. Five hundred, six hundred dollars, whatever it might be. In the whole scheme of things it is a price worth paying.”
Craig Smith, Registered Valuer, Australian ValuersSet that against the cost of being wrong. On a $900,000 sale, pricing three per cent over the market and taking an extra month to find out is roughly $27,000 of price and four weeks of buyer attention you do not get back.
Is there anyone who should not bother
“I would recommend it any time you are thinking of listing to sell, to be honest.
“The exception is if you are in an estate and there are five properties around you exactly the same that all sold, and you are happy with that price. Then you would just list it and sell it. You would not bother.”
Craig Smith, Registered Valuer, Australian ValuersThat is a clean test, and we would rather publish it than pretend every seller needs one. If your property is genuinely interchangeable with recent sales on your own street, the evidence is already public and you can read it yourself.
Does it help buyers at auction
“If you are a buyer going in on an auction, it settles the nerves a bit more. You have got some benchmarks to follow, rather than just going in blindly.”
Craig Smith, Registered Valuer, Australian ValuersCraig’s observation on that is worth repeating. People will bid hundreds of thousands over a quoted range on a Saturday morning, and never think to spend $600 finding out what the property is worth first.
Should sellers spend money before the valuation
“I would be more inclined at the moment not to be spending much at all. Just minimal. I have seen it before where people have spent a lot of money renovating and the buyer has come through and bulldozed it.
“If you are going to do the kitchen, maybe do new wraps on the cabinetry, or new handles. Do not rip it out and start again. Use what is there, repurpose what is there, just update it.”
Craig Smith, Registered Valuer, Australian Valuers“A good real estate agent will be the right person to give you the advice on what you should be doing to prepare your property for sale. That is more their game.”
Craig Smith, Registered Valuer, Australian ValuersCan people just use ChatGPT
“It is probably drawing from exactly the same pool. So the limitations would simply be in line with those types of models. If it sits in the box and there are lots of sales and it is easy to see through, it is probably going to give a pretty accurate figure. But the minute it is outside the box, a smaller market, acreage, views, it is probably going to lead you down the wrong track.
“And I am qualified and registered. If anyone suffers any losses, I am right in the firing line. Whereas if you are going to rely on an automated val or ChatGPT, there is no recourse there.”
Craig Smith, Registered Valuer, Australian ValuersThat second point has nothing to do with accuracy. A registered valuation is a professional opinion somebody is accountable for. An estimate is a number on a screen. Both can be right. Only one of them has a name attached to it.
So when is it worth it
Pulling the conversation together, here is where a pre-sale valuation earns its fee and where it does not.
| Your situation | Worth getting one? |
|---|---|
| Five near-identical homes on your street sold recently and you are happy with those prices | No. The evidence is already public. That is Craig’s own answer, and the reason this table is not just a sales pitch. |
| Acreage, a view, an elevation, or anything unusual | Yes. This is exactly where automated estimates fail, and they fail quietly. |
| A thin market where little has sold nearby | Yes. There is no comparable evidence for a model to lean on. |
| You have just finished a significant renovation | Yes. The settled sales describe the house you used to own. |
| The sale will be subject to finance, which is most sales | Yes. The report is what you put in front of a bank valuer who comes in short. |
| You are buying at auction | Yes. It gives you a benchmark and a walk-away number before the adrenaline starts. |
| Separation, deceased estate or capital gains | Yes. The figure has to stand up to somebody else later, and only a registered valuation does that. |
When a pre-sale valuation is worth the money, on Craig Smith’s own test.
Start with an instant estimate first.
It is free, it takes a minute, and it comes with a confidence rating. If that rating is high, you may not need to pay anyone. If it is low, you have just found out your property is one of the ones Craig is talking about.
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EXPERT CONTRIBUTOR
Craig Smith
Craig Smith is the director of Australian Valuers, an independent valuation firm he has run since 2008. Its valuers are members of the Australian Property Institute and registered with the Queensland Valuers Registration Board, working across South East Queensland and the Newcastle and Central Coast region of New South Wales from a head office in Maroochydore. The firm covers pre-sale and pre-purchase advice, family law and separation matters, deceased estates, capital gains and stamp duty valuations. His comments in this article are general information about valuation practice, not advice on any individual property.
