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Importance of a property valuation and inspection

Most people think buying a property is just a transaction. However, there are many factors one needs to look for during the process.

When you buy a home, the bank conducts a valuation to verify if the amount they will provide for the property is market-related. This verification ensures you do not overpay for a prospective property or undersell as a property owner.

“A valuation will happen physically by a professional valuer viewing the property or virtually, using industry data and predictive models.

“The valuation undertaken by the bank is to determine the property’s market value and does not include identifying any defects or structural concerns,” said Angela Glover, the head of product at FNB home and structured lending.

Terms you must familiarise yourself with when buying a property

• Purchase price: The amount you will pay for the property.

• Replacement value: If the property is entirely demolished because of an insurable incident, the full and current cost of replacing the building and any additional costs must be accounted for. Insurance companies use this value.

These values are particular to the property and building, not the contents of the house. Home contents insurance is separate from homeowners coverage (building coverage).

Glover said the bank also provides values upon request, which customers can order using the FNB App.

You might want to arrange for such an assessment after completing improvements or before selling to determine the market-related value.

Note that these valuations incur costs.

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