How to Get an Accurate Property Valuation
Understanding the true value of a property is crucial whether you’re buying, selling, or refinancing. An accurate property valuation helps you make informed decisions and ensures that you are not overpaying or underselling. Here’s a comprehensive guide on how to get an accurate property valuation.
1. Understand Different Valuation Methods
There are several methods used to value properties, each with its own strengths and applications. Familiarising yourself with these methods can help you choose the most appropriate one for your needs.
Rateable / Council Valuation (RV)
The Rateable Value (RV), also known as the Capital Value (CV), is determined by local councils to calculate property rates. This valuation is updated every three years and is based on a general assessment of the property and recent sales data in the area.
- Pros: Easily accessible and provides a general idea of property value.
- Cons: May not reflect current market conditions or recent property improvements.
Real Estate Agent Appraisal
A real estate agent appraisal, often called a Comparative Market Analysis (CMA), involves comparing your property to similar properties that have recently sold in the area. This method leverages the agent’s local market knowledge and recent sales data.
- Pros: Provides a market-driven estimate and considers current trends.
- Cons: Can vary between agents and may be influenced by the agent’s desire to secure a listing.
Registered Valuation
A registered valuation is conducted by a certified property valuer who provides an independent assessment of the property’s market value. This involves a thorough inspection and analysis of the property, including its condition, location, and recent comparable sales.
- Pros: Highly accurate and unbiased, often required by lenders.
- Cons: More expensive and time-consuming compared to other methods.
2. Choose a Qualified Professional
Selecting the right professional to conduct your property valuation is crucial for accuracy. In Aotearoa, property valuations should be carried out by registered valuers who are certified by the Valuers Registration Board.
- Find a Registered Valuer: You can locate registered valuers through the NZ Gazette website or the Property Institute of New Zealand.
- Check Credentials: Ensure the valuer has a current practising certificate and experience in valuing properties similar to yours.
3. Prepare Your Property for Valuation
To ensure an accurate valuation, make sure your property is in its best possible condition before the valuer’s visit.
- Clean and Declutter: A tidy and well-presented property can positively influence the valuation.
- Complete Repairs: Address any minor repairs or maintenance issues.
- Provide Documentation: Have relevant documents ready, such as recent renovations, council consents, and property plans.
4. Provide Comprehensive Information
The more information you provide to the valuer, the more accurate the valuation will be. This includes:
- Property Details: Size, age, construction materials, and unique features.
- Recent Improvements: Any renovations or upgrades that have been made.
- Neighbourhood Information: Proximity to amenities, schools, public transport, and any other factors that might affect the property’s value.
5. Understand Market Conditions
Property values are influenced by market conditions, including supply and demand, interest rates, and economic factors. Staying informed about the current market trends can help you understand the context of your property’s valuation.
- Supply and Demand: High demand and low supply can drive up property values, while the opposite can decrease them.
- Economic Factors: Interest rates, employment rates, and economic growth can impact buyers’ purchasing power and, consequently, property values.
6. Use Online Tools Wisely
Online property valuation tools can provide a quick estimate of your property’s value based on algorithms and available data. Websites like Trade Me Property Insights, Homes.co.nz, and OneRoof offer estimated value ranges.
- Pros: Convenient and free to use.
- Cons: May not consider the property’s condition or unique features, and estimates can be broad and less accurate.
7. Review the Valuation Report
Once you receive the valuation report, review it carefully. The report should include:
- Legal Description: Details of the property’s legal status and any encumbrances.
- Methodology: Explanation of the valuation method used and the rationale behind the final value.
- Market Analysis: Comparison with recent sales of similar properties and analysis of market trends.
8. Seek a Second Opinion if Necessary
If you are unsure about the valuation or if it differs significantly from your expectations, consider seeking a second opinion from another registered valuer or a real estate agent.
Getting an accurate property valuation is a vital step in any property transaction. By understanding the different valuation methods, choosing a qualified professional, and preparing your property thoroughly, you can ensure that the valuation reflects the true market value. Remember, an accurate valuation not only helps in setting the right price but also provides confidence and clarity in your property dealings.