A property valuation is not simply a figure placed on a property. It is a structured assessment process that considers the purpose of the valuation, the relevant valuation date, the property being assessed, the available evidence and the assumptions or limitations that apply.
This page explains the usual steps in a property valuation. The exact process may vary depending on the property type, instructions, valuation purpose and report format.
Start here
If you are new to property valuation, begin with the steps below. They explain how a valuer moves from instructions through to inspection, evidence analysis and the final report.
Step 1: Instruction and scope
The valuation process begins with instructions.
The valuer needs to understand the property interest being valued, the purpose of the valuation, the relevant valuation date, the basis of value and the intended user of the report.
The scope of work may also identify the inspection basis, information relied upon, assumptions, limitations and any special requirements of the instructing party.
Clear instructions are important because the same property can require different analysis depending on whether the valuation is for Family Law, Capital Gains Tax, Stamp Duty, a deceased estate, SMSF reporting, pre-sale advice or another purpose.
For CGT work, your accountant or tax adviser should confirm the required valuation date before the instruction is finalised. The guide to documents for a CGT valuation explains what property records may assist.
Step 2: Property inspection
The valuer inspects the property to understand its physical characteristics and market appeal.
This may include consideration of land area, location, aspect, building size, accommodation, condition, layout, car accommodation, ancillary improvements, defects and any features that may influence market value.
An inspection may be internal and external, external only, kerbside or desktop, depending on the instruction and the report purpose.
Where the inspection is limited, the report should make that limitation clear.
Step 3: Market research and evidence
The valuer then researches the relevant market.
For residential property, this usually involves identifying and analysing comparable sales. For commercial property, rental evidence, lease terms, market rent, yields and income evidence may also be relevant.
Not every nearby sale is comparable. The valuer considers the relevance of each item of evidence having regard to location, date, land size, improvements, condition, buyer profile and sale circumstances.
Step 4: Valuation analysis
The valuer applies the valuation approach appropriate to the property type, purpose and available evidence.
For many residential properties, the direct comparison approach is the primary method. For income-producing commercial property, the income approach may be relevant. For some properties, a summation or cost approach may be used as a cross-check.
The valuation is not a simple average of sales or rate indicators. The valuer weighs the evidence and applies professional judgement.
Step 5: Report preparation
The valuation opinion is then recorded in a written report.
The report should identify the property, purpose, valuation date, basis of value, instructions, inspection basis, assumptions, limitations, methodology, evidence considered and final opinion of value.
For formal matters, the report format and content should reflect the stated purpose and intended use.
Why the valuation process matters
Understanding the process helps readers understand why a valuation report may differ from an agent appraisal, online estimate, government land value or contract price.
A formal valuation is prepared for a stated purpose and valuation date. It should explain the reasoning behind the conclusion, not simply state a number.
Common questions about the valuation process
- How long does a property valuation take?
- What happens during a property inspection?
- What documents should I provide to a valuer?
- Who can rely on a valuation report?
- Can a valuation be updated after it is completed?
- Why does the purpose of valuation matter?
Discuss your valuation instruction
To discuss a property valuation in Canberra, the ACT or surrounding NSW, provide the property address, purpose, required valuation date and relevant adviser instructions. Northbourne Valuers can explain the proposed scope, information needed, fee and timing.
Read about Northbourne Valuers’ valuation services
Related articles
- What is Market Value?
- What comparable sales does a valuer rely on?
- What is an arm’s length sale?
- What does highest and best use mean?
- What is Vacant Possession?
- Why Property Valuations Differ?
Related glossary
- Scope of Work
- Date of Valuation
- Date of Inspection
- Internal Inspection
- External or Kerbside Inspection
- Desktop Assessment
- Comparable Sale
- Market Evidence
- Reliance
Related services
Prepared by:
Tigran Amiyants, Certified Practising Valuer (CPV), Managing Director, Northbourne Valuers.
Last reviewed:
12 September 2026.
General information note:
This page provides general information only and does not constitute valuation, legal, taxation or financial advice. Every valuation depends on the specific property, purpose, valuation date, evidence, assumptions and instructions.