How to read a property report

With so much information and data on homes available online, you can do a whole lot of research from the comfort of your own home. A property report can provide you with stacks of info on not just the home but the surrounding area too. With that said, sometimes it can be difficult to pick the relevant details from fluff. Here are a few tips to help you understand a property report.

What is a property report?

A property report is a comprehensive document that includes useful information about a specific property, like its estimated value, physical characteristics, sales and rental history and information about the suburb. You can often source them online from banks and other real estate websites. 

With all this information on hand, property reports are often used by potential buyers who are interested in a particular property or homeowners who are keen on selling their home. Ultimately, they’re there to help both buyers and sellers alike make informed decisions when it comes to the property.  

What information is included in a property report?

While the information you’re likely to get on a property report depends on where you source it from and the type of property, it will often include the following sections:

• Property details: This section provides basic information about the property, including its address, legal description, and size, along with the number of bedrooms, bathrooms and garage spaces. It will also often include real estate photos of the property.

• Estimated value: The report will often provide a price range estimate based on available information. The estimated value range provides a projection of where the sales price is expected to fall.  

• Sales history: This section details the property's sales history, including the dates of previous sales and the corresponding sale prices. It might also include details on the real estate agency name who sold the property and how long the property was on the market. 

• Recent comparable sales: Many property reports provide data on recent sales of similar properties in the area, known as ‘comps’, which can provide you with a better understanding of the property's market value.

• Properties for sale and rent in the area: Similar to the comparable sales section, many property reports also include details on comparable properties that are currently listed for sale or rent in the area which can be helpful for potential investors. 

• Suburb insights: This section provides insights and information about the surrounding area, including demographics, crime rates, schools, public transport, shopping centres, emergency services, medical facilities and other useful amenities.

Tips for reading a property report

With so much information at your fingertips, it can be easy to get lost in the details. Here are some tips to help you pinpoint the relevant information so you can understand a property report:

• Start with the basics: Begin by reviewing the basic information such as the property address, legal description, and size. This sets the foundation for understanding the report and the property itself.

• Check the ownership history: Examine the ownership section to understand the history of ownership changes. Look for the dates of previous sales and the corresponding sale prices. Analyse the sales history to understand how the property's value has changed over time. 

• Look at recent comparable sales: Evaluate the comparable sales data to gauge the property's current market value. Look for similarities in size, location and features when comparing with other recent sales in the area.

• Analyse the estimated price range: The estimated price range can provide you with a general indication of the sales price but it’s important to take this information with a grain of salt. This type of information isn’t always accurate and isn’t a substitute for a professional property valuation. 

• Check out the neighbourhood: Examine the neighbourhood data, including demographics, crime rates, schools, and amenities. This helps you understand the local context and potential impact on property value.

• Look at the building and construction details: Understand the details of the property's structure, including the number of bedrooms and bathrooms, square footage, and construction materials. This information is crucial for assessing the property's physical condition and renovation potential. Plus, it can also help you to figure out whether the property meets your needs.

• Consult professionals: If certain aspects of the report are unclear, consider consulting with real estate professionals, like local real estate agents, appraisers or property inspectors. Chances are they’ll be able to provide additional insights and clarify any complex information.

Limitations of property reports

While property reports can provide valuable information, they don’t come without some limitations. With this in mind, it's important to be aware of these limitations and factor them into your decision-making. Here are just some of the common drawbacks of property reports:

• Incomplete or outdated information: A property report is only as good as the data and information it’s sourced from, so if there’s limited information on a specific property it’s likely that the report won’t provide a complete picture.

• Data accuracy: The accuracy of the information in a property report depends on the sources it’s based on. Errors or inaccuracies can occur from time to time, and it’s possible that discrepancies between the report and the actual property characteristics could exist.

• Limited future predictions: Property reports provide information about the past and present. They’re generally not able to predict future changes in the property market or neighbourhood dynamics. Property values and market conditions can change rapidly, so property reports can quickly become out of date.

• Doesn't substitute professional advice: Property reports should be used as a tool for information, but they are not a substitute for professional advice. It's essential to consult with real estate professionals, such as appraisers, inspectors, or real estate agents, for a more thorough understanding of a property's condition and value.

When it comes to researching a potential property, property reports are just one piece of the puzzle. While they offer an overview of the property, it’s important to use the information included in property reports alongside additional information and research. Be sure to get out there and do the rounds at home opens to really get a feel for what’s available and the state of the local property market. As a potential buyer, there’s a lot to be said about arming yourself with as much information as possible when it comes time to make an offer or negotiate on a property. For more information on buying a property, check out our collection of articles on the home-buying process.

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This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Please consider seeking financial advice before making any decision based on this information.‍