CPPREP4101 student workbook three
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Student workbook 3
Property appraisal and the property
CPPREP4101 Appraise property for sale or lease
TAFE NSW would like to pay our respect and acknowledge Aboriginal and Torres Strait Islander Peoples as the Traditional Custodians of the Land, Rivers and Sea. We acknowledge and pay our respect to the Elders, both past and present of all Nations.
Version:
02072020 Date created:
04 September 2019
Date modified:
18 March 2024
For queries contact: Technology and Business Services SkillsPoint
© TAFE NSW 2020
RTO Provider Number 90003 | CRICOS Provider Code: 00591E
This resource can be found in the TAFE NSW Learning Bank.
The content in this document is copyright © TAFE NSW 2020 and should not be reproduced without the permission of TAFE NSW. Information contained in this document is correct at time of printing: 18 March 2024.
For current information please refer to our website or your teacher as appropriate. Document title: CPPREP4101_SW_3of5
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Contents
Inherent features
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5
Location
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5
Aspect
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5
Views
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5
Activity 1: The Castle
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6
Land
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6
External features
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8
Surrounding development
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8
Nature and street condition
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8
Amenities
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9
Services
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9
Property attributes
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10
Building construction
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10
Aesthetic and design features
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11
Building styles
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11
Activity 2: Different building styles
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11
Floor layout
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12
Faults and hazards
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14
Foundation movement
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14
Rising damp
..........................................................................................................................
14
Sagging roofs
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15
Brickwork and concrete faults
..............................................................................................
15
Activity 3: Building condition
................................................................................................
16
Activity 4: Property inspection checklist
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16
Building improvements and modifications
...............................................................................
17
Property condition and presentation
...................................................................................
17
Heating, cooling and ventilation systems
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17
Energy efficiency and building sustainability ratings
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18
Activity 5: Energy efficiency and sustainability ratings
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19
Activity answers
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20
Activity 1: The Castle
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20
Activity 2: Different building styles
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20
Activity 3: Building condition
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21
Activity 4: Property inspection checklist
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21
Activity 5: Energy efficiency and sustainability ratings
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21
End of lesson check
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Bibliography
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References and image attributions
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Inherent features
The inherent features of the land affect a property’s value. These include its location, improvements, aspect, views and land characteristics.
Location
Have you heard the phrase ‘location, location, location’? It’s the most important feature. Consider the location examples below:
Location within the same building
Two units located in one building with the same size and inclusions does not mean they are the same value. One unit may have a view of the beach while the other’s view is the carpark. The first unit has a higher value than the second unit. Location in the same suburb/city
Two properties with equal features and condition are not the same value if one house is in a
semi-industrial area and the other located in a more sought-after area. Location in a neighbourhood
Closeness to schools, transport, shopping, parks and recreation centres, and other amenities
will be reflected in the value of the property. Also, properties located on main roads will be priced differently to similar properties in adjoining streets.
Location and street design
The location of the property in a street does not affect the value of the land, but corner sites
and sites positioned at the end of a cul-de-sac are more desirable because of their potential.
Aspect
The aspect of a property is determined by the direction of the sun. A northerly aspect, for example, has the morning sun in winter.
Views
Buyers are prepared to pay a premium for views, particularly water views. Not all views will add value; some views will detract from the land.
Views that add value include:
beach/ocean
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harbour view
lake view
mountain view
parks and golf courses.
Views that will detract from the land include:
rubbish tips
slum area
industrial area
main highway
railway line
airport
large power lines.
Activity 1: The Castle
Watch the video trailer for The Castle
(YouTube, 1:44 min https://youtu.be/41t-xc302wM), about the Kerrigan family living at 3 Highview Crescent, Cooloroo, then answer the question below:
List two things that affected the value of the house and discuss why you think these things added value or reduced the value of their home. Answers are at the end of this workbook.
Land
The characteristics of the land directly affect the value of the property.
Dimensions
The frontage and the depth of the land may affect its worth. The dimensions will determine the size of a dwelling that can be built on the land.
Area
The area (size) of land is determined by its dimensions. In modern times it is measured in square metres. For example, a block of land that is 17 m x 42 m = 714 m
2
.
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Shape
The shape of the land will also affect its value. Blocks of land come in several shapes including rectangular, square, fan-shaped, battle axe and triangular. Standard subdivision practice compels the developer to use designated road patterns that produce a variety of land shapes.
Topography
The topography or slope of the land can have a positive or negative impact on value. A steeply sloping block may cause higher building costs but the view may be better. A developer who wants to build a small complex of villas or townhouses will need the slope of the land to run in the same direction as the drainage of the land. If the slope is in the opposite direction it can be a very costly exercise. As vacant land becomes scarcer, there is a
need to build on steeper land. There are many examples on the coast. In some areas, there are restrictions on building homes on slopes because they add to the rapid spread of bushfires.
Soil and sub-soil
Soil that has been added to the existing soil to make it more level is called ‘fill’. It is better to
build on land that has not been filled. Filled land can add thousands of dollars to building costs, particularly pier and beam construction. Building on solid rock can cost more, too. Contamination
Contaminated land can be a major problem and will have a negative impact on the value of the land The S10.7 Planning Certificate from the local council will show if the land is contaminated and other relevant planning matters.
The S10.7 Planning Certificate is a very important document. The Planning Certificates
page on Cowra Council’s website will help you become familiar with the purpose and main types of information contained in the S10.7 Planning Certificate.
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Left: Mineral fertilizer plant. Right: Garbage dump
External features
External features are factors in the surrounding neighbourhood, suburb, city or town that affect the estimated selling price or rental value of the land.
External features that can affect the value of property are surrounding development, nature
and street condition, amenities and services.
Surrounding development
Developments surrounding the property such as good quality homes, low or high density housing, or a semi-industrial area can have a direct impact on the estimated selling price or rental value of the property.
Remember, it is better to have the worst house in the best street than to have the best house in the worst street.
Nature and street condition The nature and condition of the streets will affect the price in a similar way as the surrounding development.
In a suburban area, neatly kerbed, guttered and tree-lined streets are preferred. Footpaths are also preferred—however, in some affluent areas this is not the case.
In semi-rural or rural areas, the preferred streetscape has no kerb or guttering. In this instance, it does not detract from the appeal or the value of the property.
When you appraise a property’s street, the main points to consider are if the street is sealed
and has footpaths, kerbs and guttering.
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Amenities
The distance of the property to amenities will affect the estimated selling price and rental value. You need to determine if the property is close to:
transport (buses, ferries, trains)
shops (local or major shopping centres)
schools (within walking distance)
entertainment (clubs, restaurants, cinemas and theatres)
recreation areas (parks, sporting fields and facilities)
places of worship.
Services
You need to determine the services that are available on the property, in particular:
water (town supply or tank water)
gas, electricity or both
garbage collection and other council services
sewerage or septic system
telephone and/or NBN/broadband access
trade waste collection
television reception.
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Property attributes
Your inspection will record the property attributes including the property’s construction, aesthetic and style, floor plan, faults, inclusions, condition and presentation. You’ll also inspect and record the property’s heating, cooling and ventilation systems, energy efficiency
and compliance with regulatory requirements.
Building construction
The type of materials used in the building’s construction may affect the value of the property because of the costs involved. For example, a double storey, four-bedroom, full brick, uniquely designed home will cost more to build than a single level, four-bedroom weatherboard, uniquely designed home. It may mean that the building materials cost more initially but require less maintenance in the long term.
This means you will need to learn to identify the different construction materials. Are the walls:
double brick or brick veneer
asbestos or cement cladding
Hardiplank®, vinyl or aluminium cladding
natural timber (cedar) or weatherboard (hardwood)?
Is the roof:
Colourbond®
iron
fibro cement shingles
decramastic tiles (metal tiles)
slate
terracotta or cement?
Is the structure of the roof truss, flat, skillion or a vaulted?
A truss roof
is a series of two-dimensional triangulated frames that support the roof and
shares the weight of the roof across the whole house.
A flat roof
is almost level. It has a slope of about 25.4 cm and can be made of different materials.
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A skillion roof
is a one-way pitched roof of even fall running from the highest point at one side to the lowest point at the opposite side.
A vaulted roof
is an arched roof. The rafters are usually internally exposed.
Aesthetic and design features
The way a property looks and the way it has been designed will affect the price. When you appraise a property, you need to consider the design and building style, floorplan, inclusions
and the overall condition.
Your inspection will help you determine the property’s design. For example, is it double, single or split level, a villa, townhouse, unit or duplex?
The aesthetics of a property is its appeal and takes in design features such as shape, proportion, texture, colour, balance, pattern and decoration. There is no doubt that the perception of aesthetics and the awareness of ‘beauty’ has changed over the years and will continue to change. You can see examples of the different building styles in every suburb or town.
Building styles
Building design styles change over time where trends or fashions influence the types of materials used in the construction.
The building style will usually give you an idea of the property’s age and will also help you identify the property’s features. Understanding architectural building styles may provide ideas for marketing. Some areas pride themselves on the architectural styles of properties in
their location.
Most of Australia’s building styles were imported, but they have been adapted to our climate and conditions. Over the years there has been some argument as to when one building style began and ended. The article
Australian architecture styles: how to identify your home
, A brief history lesson on residential architecture in Australia, identifies the features of seven architecture styles prevalent in Australia.
Activity 2: Different building styles
Try to find examples of Victorian, Federation, Art Deco, and California Bungalow buildings in your local area. List some of the features found in homes of these periods. Answers are at the end of this workbook.
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Floor layout
The layout and size of the property will affect the value of the property. Today, there is more emphasis on living areas and outdoor entertaining. When carrying out a property appraisal, you need to consider the rooms, the room sizes and the overall condition of the property.
Living room
Most homes have a living room, a place where you can spend time together as a family and watch television. When appraising the home, take note of the size and shape of the room. Does the furniture fit? What is on the floor? Is it carpet, tile or wood? Take note of the condition of the room including paintwork, flooring and light fittings. Dining room
The dining room seems to have disappeared in newer homes, but if you appraise property with a dining room, take note of the size and shape of the room. Does the dining table fit in the room? Is the floor carpet, tile or wood? What is the condition of the room’s paintwork, flooring and light fittings?
Kitchen
It has been said the kitchen is the heart of the house. The size of the kitchen is important. Can two people move around the kitchen with ease? Is it light and airy? Kitchens come in many styles and materials. What materials are used for the benchtops and cupboards? For example, Caesarstone® is more valuable than Laminex. Is there plenty of storage space? Does the kitchen have a walk-in or butler’s pantry? What type of appliances are in the kitchen? Is it a floor stove and oven or a bench-top stove and wall oven? Is there an exhaust fan over the stove? Does it have a dishwasher and microwave? Updating a kitchen can be costly, so note the condition and age of the kitchen. Do the appliances and kitchen need an update?
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Bedrooms
Most homes have at least three bedrooms. The size of the bedroom is very important. You’ll need to determine if it is a king, queen, double or single room. The bedroom is considered a king bedroom if it can fit a king-size bed with bedside tables and you can move around the room with ease. You need to take note of the condition of the bedrooms, floor coverings and paintwork. Bathroom and ensuite
Bathrooms are another room that can be costly to update. Is there also an ensuite in the property? What condition is it in and is it dated?
Does it have a shower and bath? Is the shower separate or over the bath? Is there a separate toilet? Laundry
The laundry can be internal or external to the property. If the laundry is internal, is there a door to the yard? Does it have bench space and cupboards? Does it have a space for a dryer? Does the laundry need an update? Other rooms
Is there a rumpus room, theatre room, study and/or a kid’s activity room?
Garage and outbuildings
Does the property have sheds, garage, carport or off-street parking? Does it have a single or double garage or carport? Is it attached to the property or separate? If it is attached, does it
have internal access? The yard
Is the yard fully fenced? Does it have an entertaining or barbecue area? If so, is it under cover? Is it a family-friendly yard? Is there is a swimming pool in the yard? If so, is it an in-ground or above-ground pool?
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Faults and hazards
Faults and hazards are problems that could greatly affect the pricing on the property if they are not resolved. They can also affect the safety and wellbeing of the residents and visitors to the property. For example, if the stairs at the entrance of the home are cracked, it is not only dangerous but unattractive. Cracked tiles in the bathrooms are also a hazard and need to be fixed. Other faults include foundation movement, rising damp and sagging roofs. Not only are these unsightly but expensive to fix. As an agent, you’ll learn to recognise these faults as they will affect the value of the property.
Foundation movement
Foundation movement can be caused by:
moisture content in clay-type (plastic) soils that swell on wetting and shrink on drying
uneven settlement of the foundation
soil creep
the presence of trees
solar radiation.
The visible effects of foundation movement are:
stepped cracking
the overturning of isolated piers
cracks in slab-on-ground floors
vertical cracks.
Rising damp
Rising damp can be caused by:
deterioration of damp course materials such as slate, lead and bitumen from age or from movement in the brickwork
a complete absence of a damp course
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presence of holes in the polythene membrane used under slabs on the ground
bridging the damp course with garden soil so that the soil is higher than the damp course level
bridging the damp course in cavity walls with built-up debris, allowing moisture to by-pass the damp course
leaking showers.
Sagging roofs
Sagging roofs will bow or dip in all or part of the roof and can be caused by:
spread of roof timbers because of insufficient collar ties
foundation movement causing wall movement
undersized or wrongly supported rafters
truss roof not supported as it should be
defective roof tiles which absorb moisture making them too heavy for the roof
roof replaced with a heavier system than the original roof design will support.
Brickwork and concrete faults
Brickwork and concrete faults can be caused by:
lime mortar breaking down that may require re-pointing
moisture being absorbed resulting in brick movement
steel lintels rusting and expanding over doors and windows (common in seaside areas)
corrosion of reinforcement in concrete slab resulting in concrete cancer (spalling). Balcony slabs are vulnerable.
efflorescence because of salts leaving brickwork (damage is cosmetic).
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Activity 3: Building condition
Examine the below image. What are the major problems with the house? What advice would you give the client? Answers are at the end of this workbook.
Figure 3 Derelict house Activity 4: Property inspection checklist
For this activity you will practise using the ABRG residential property inspection form
(docx).
Find a property to inspect in your area such as an ‘Open for inspection’, ‘Display home’, your
own or a friend’s home. Take a photo of this property, walk around and complete the inspection checklist. This document will be used again in another activity in the next lesson. Answers are at the end of this workbook.
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Building improvements and modifications A property that has had improvements and modifications carried out professionally will add value to the property. It is visually attractive and the buyers will know that the work has been done correctly. Have the owners had extensions done on the property? Were the extensions done by a professional builder? Have the extensions been council approved?
However, if the improvements, modifications or extensions have been done badly, it will have an adverse effect on the pricing of the property, particularly if the work was done incorrectly and it needs to be redone.
Property condition and presentation
If the property is well maintained, updated and presented, it will attract a lot of interest and have a positive impact on the price. On the other hand, a property that is dated, badly maintained and poorly presented will have a negative impact on the price. In most situations, the owner will ask if you can see anything that needs to be done. They will also ask if you have any ideas about how they should present their home for sale. If you have already prepared a guide to presenting the home for the market, this will help your client. When you carry out a rental appraisal, you must explain to the owner their duty of care under section 52 of the Residential Tenancies Act 2010 No 42
(NSW) to provide the residential premises in a reasonable state of cleanliness and fit for habitation by the tenant. Also, advise the owner that the way the tenants find the property when they move in is the way they should leave it when they move out. If the owner wants to attract a better tenant and wants the home to be maintained at a certain standard, they will need to ensure that they present it to the public at that standard.
Heating, cooling and ventilation systems
Good heating, cooling and ventilation systems will have a positive effect on the pricing of the property. The buyer will know that the property is less likely to have mould issues and they won’t have to worry about installing air conditioners. You’ll need to take note of the type of system. Does the property have a ducted, split system or wall air conditioner? Document title: CPPREP4101_SW_3of5
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A property that has poor ventilation may affect the pricing of the property as it could cause a mould issue, and this is a concern to both buyers and tenants. A property that has dated or broken heating and cooling systems may have a negative impact on the pricing of the property as the buyer will want to adjust the price by the cost of replacing the existing system. You must take this into consideration when you are carrying out the appraisal. Energy efficiency and building sustainability ratings
In an era with energy efficiency and building sustainability ratings, a property that already has them in place will have a positive effect on the appraisal as these features will attract interest from buyers.
Energy efficiency standards were added to the building code of Australia in 2003 followed by water efficiency standards. Energy efficiency is based on star ratings that range from zero
to ten. They are based on the predicted energy used for homes in different areas. A building with a six-star rating is deemed as having the minimum energy efficiency standard and has a good but not outstanding thermal performance.
A building with a 10-star rating may not need any artificial heating and cooling to keep the occupants comfortable. The national construction code is maintained and published by the building codes board in each state and territory. It outlines the minimum requirements for safety, health, sustainability and amenity in the design and construction of new buildings. Water efficiency measures (WEMs) have been introduced to help conserve the amount of water used. If a property for lease does not have the WEMs in place, the tenant cannot be charged for water usage. The WEMS must be installed by a licensed plumber and once completed they must issue a certificate of compliance to the owner.
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Activity 5: Energy efficiency and sustainability ratings
Read the Sydney North Shore, New South Wales
case study on the Australian government ‘Your Home’ website.
List the steps the developer put into place to make the development more sustainable. Answers are at the end of this workbook.
Compliance with regulatory requirements
A property that does not comply with regulatory requirements will have a negative effect on
the appraisal. A property that does not have working smoke alarms installed cannot be offered for sale: this is a condition of the contract for sale. Also, a property cannot be leased to tenants without working smoke alarms installed.
If a property has a swimming pool, and the client does not have either a compliance or non-
compliance certificate, it cannot be offered for sale or lease. A property that has loose-fill asbestos will have a negative impact on the pricing of the appraisal because of the dangers of asbestos and the cost of removing it. Today, a home with loose-fill asbestos must be registered with NSW Fair Trading. If it is to be leased, either the landlord or the property manager needs to inform the tenant before they sign the lease. If the property is to be listed for sale, and the property is on the loose-fill asbestos register, these details will appear in the S10.7 Planning Certificate attached in the contract for sale to warn all buyers.
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Activity answers
Activity 1: The Castle
Watch the video trailer for The Castle
(YouTube, 1:44 min https://youtu.be/41t-
xc302wM), about the Kerrigan family living at 3 Highview Crescent, Cooloroo then answer the question below:
List two things that affected the value of the house and discuss why you think these things
added value or reduced the value of their home.
Suggested responses could include, but are not limited to:
There are several features that would detract from the value of the land and the building for
example the:
location next to the airport runway with a view of the runway and aeroplane noise
large powerlines close
unfinished street caused by the failed housing development
poor building construction such as the sloping floor in the poolroom
partly completed extensions and the reference to using cheap building materials.
Activity 2: Different building styles
Try to find examples of Victorian, Federation, Art Deco, and California Bungalow buildings in your local area. List of some the features found in homes of these periods.
Suggested responses could include, but are not limited to:
Victorian architecture covers a long period between 1800 to 1900.
Late Victorian homes have cast-iron lacework, fireplaces, decorative plaster ceilings. The living and dining rooms are towards the front of the house with kitchens to the rear. Bedrooms are off the hallway or upstairs in a two-storey terrace.
Federation are adaptations of Edwardian style homes. They are usually red brick with stained glass windows, bay windows, return verandahs, tessellated tiles, pressed-metal ceilings, turned-timber posts and roofs in either slate or terracotta tiles.
Art Deco is defined by curved facades and decorative brickwork, geometric elements, chevron patterns. These can still be found in country towns and older suburbs.
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California Bungalow are single storey, sloping roof, front porch with tapering verandah pylons and simple layout. They were popular because they were modest and affordable style of housing – less fuss, less maintenance. They had pergolas and breezeways for easy indoor-outdoor living. Californian bungalows were set on decent-sized blocks of land, allowing for a spacious backyard. These buildings are plentiful in Australian cities and towns.
Activity 3: Building condition
Examine the below image. What are the major problems with the house? What advice would you give the client?
Suggested responses could include, but are not limited to:
It is highly unlikely that this property can be sold unless it is to be preserved as historical architecture.
This property may be heritage listed because of its age.
The property is in a bad state of repair and would not be considered habitable under current laws.
It would take extensive renovations to bring it to a habitable condition.
Activity 4: Property inspection checklist
For this activity you will practise using the ABRG residential property inspection form. Find a property to inspect in your area such as an ‘Open for inspection’, ‘Display home’, your own or a friend’s home. Take a photo of this property, walk around and complete the inspection checklist. This document will be used again in another activity in the next lesson.
Suggested responses could include but are not limited to the completed checklist for a property at 210 Church Street, Azure Beach
(pdf).
Activity 5: Energy efficiency and sustainability ratings
Read the Sydney North Shore, New South Wales
case study on the Australian government ‘Your Home’ website.
List the steps the developer put into place to make the development more sustainable.
Suggested responses could include, but are not limited to:
The first step was to identify the features of the site, location and climate.
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The next step was to design sustainable buildings that would reduce energy, mains water use and greenhouse gas emissions. Finally, the construction process was designed to use recycled or renewable materials to reduce waste and select products and finishes to reduce indoor air pollutants. For example:
In the passive design each townhouse has a north facing outdoor living terrace so the
winter sun penetrates the concrete thermal mass, double-brick party walls and clerestory windows. The bedrooms and amenities were in the southern side wherever possible.
Rainwater tanks with a capacity of 10,000 L provide water to toilets, washing machine and at least one garden tap reducing mains water use. To conserve water, highly efficient fittings were connected to showerheads and the kitchen and bathroom taps.
Demolition waste was used for 40% of the landfill and tradespeople used offcuts wherever possible.
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End of lesson check Well done, you’ve completed the ‘property appraisal and the property’ lesson. Can you answer ‘yes’ to these statements?
I can identify and record property features and attributes for a property appraisal.
I can explain how the land’s inherent and external features affect the estimated selling price or rental value.
I can describe how property attributes and design features affect the estimated selling price or rental value.
I can explain how faults, hazards, property condition and presentation affect the estimate selling price or rental value.
If you answered ‘no’, revise the topics you’re unsure of. If you answered ‘yes’ to each statement, you’re ready to do the quiz.
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Bibliography
Sandak, A. &. (nd). Aesthetics in architecture - how beauty and design are inspring each other
. Retrieved from bre: https://www.bregroup.com/insights/aesthetics-in-architecture-how-
beauty-and-design-are-inspiring-each-other/
References and image attributions
Australian Government: Sydney North Shore, New South Wales. Retreived June 2020, from YourHome: https://www.yourhome.gov.au/case-studies/sydney-north-shore-new-south-wales
Clarke, O. (2019, Mar 12). 7 architecture styles: how to identify your home
. Retrieved June 2020, from Homes to love: https://www.homestolove.com.au/architecture-styles-australia-14457
NSW Government. Residential Tenancies Act 2010 No 42 Section 52
(NSW). Retrieved June 2020, from Legislation NSW: https://www.legislation.nsw.gov.au/view/html/inforce/current/act-2010-
042#sec.52
Planning Certificates. (n.d.). Retrieved July 2020 from Cowra Council: http://cowracouncil.com.au/index.php/14-general/171-zoning-certificates
Image
Page #
Attribution
Cover
1
Photo by
Tierra Mallorca
on Unsplash
CC0 1.0 Universal (CC0 1.0)
Figure 1 Left: Mineral fertilizers plant. Right: Garbage dump
7
© Getty images copied under licence
Left image credit: Makhnach_M Creative #: 492790242
Right image credit: Andrea Pistolesi Creative #: 1133148141
Figure 2 Derelict house
15
Image
by Donna O'Donoghue
from Pixabay Free for commercial use
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