Aug 26, 2020 10:27:03 AM

Understanding Property Valuations

Topics: NZ Finance, property value, Home Loan Advice, Property Valuation 0

Whether you’re buying or selling, determining the value of a property is an important step in the process. A property valuation – an assessment of a property’s market worth – can help you set a realistic sale price when you’re selling and be a valuable tool when it comes to negotiating a purchase price when you’re buying. Here is a guideline to understanding property valuations.


What is a property valuation?
A property valuation is an independent assessment of the value of a property based on a number of different elements: the current market, recent sales, council information, size and condition of the property. A property valuation is done when you’re buying or selling a property and is often a condition of finance that lenders require when you apply for a mortgage.

Who undertakes a property valuation?
In New Zealand, property valuations are undertaken by a registered property valuer. Registered valuers must be certified by the Valuers Registration Board. You can find a list of registered valuers on the NZ Gazette website.

What does a property valuer do?
When valuing a property, a property valuer will:

• Inspect the house inside and out.
• Measure the dimensions of the house and rooms.
• Note the building construction type and the materials used.
• Estimate or find out the age of the house.
• Rate the condition of the house.
• Inspect the house inside including looking at walls, floors, ceilings, doors, design features, natural and artificial light, ventilation, exterior cladding, the roof, guttering, and fencing.
• Take into account outstanding maintenance.
• Measure garages and note car parking and access.
• Inspect the site noting any issues such as flooding, drainage, and subsidence.
• Check out the immediate neighbours, the street, and the local area noting all the positives and negatives.
• Work out the distance to the centre of town and look at the convenience of public transport.
• Refer to the district plan and note the present use of the property in relation to its zoning.
• Take into account the type of title.
• Collect data about recent sales that can be used to value the property.
• Make an assessment of marketability based on their observations.
• Take into account the current state of the real estate market for that type of house in that area.
• Prepare a written report.

What is a property valuation used for?
When buying a property, you should commission a valuer to undertake a property valuation before putting in an offer. That way any issues identified by the valuer can be addressed in the negotiation process and the document can be used to assist in negotiating the price.

When selling a property, it’s important the asking price fairly reflects the true value of the property. A registered valuation will help you ensure the property is realistically priced before it is listed on the market.

The team of mortgage advisers at Mortgage Express can advise you on all you need to know about applying for finance and the home buying process, as well as KiwiSaver withdrawals and HomeStart Grants for first home buyers. We’re also experienced at working with a panel of lenders so can connect you with the right lender for your unique situation.

Get in touch today if you’d like to find out how a Mortgage Express adviser can work with you to finance your next property purchase.

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While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Mortgage Express Limited for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication.

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