What is a property valuation and why should I get my property valued?

April 1, 2020

So, what is a property valuation?


A property valuation is an estimated value given by a trained and registered professional on residential or commercial property. A valuation could also be carried out on rural property, land or lifestyle blocks. In short getting a property valuation from a professional lets you know what your property is worth.

The main reason for getting a valuation carried out on your property is when you are buying, selling or in some way shifting equity within the property. An independent valuer has nothing to gain from the property transaction, whereas a real estate agent might. Therefore, a registered valuer can be trusted to provide an impartial and accurate value for all parties involved. 

aframe valuation

What’s the benefit of getting your property valued?

Often a valuation is required by your primary lender; the bank that you will be servicing your mortgage with. Your bank may need to add a level of certainty before they lend. Although not exclusively, banks tend to normally require valuations for first home buyers, and borrowers with low equity loans or private sales. 

In the case of private sales, a valuation is almost exclusively required. Without this, a bank cannot really know the market value of the property and there is the risk that their customer might be overpaying and increase the risk of the loan. 

Who is allowed to value a property and where do I find them?

Only a registered valuer is allowed to value a property. To be a registered valuer you have to hold Annual Practising Certificate issued by Land Information New Zealand (LINZ). In order for a valuer to gain an Annual Practicing certificate, they must pass an exam or hold a recognised certificate.

A registered valuer is not to be confused with a real estate agent who can give their own valuations. The valuations an agent can provide are not necessarily less accurate, but do not have the weight of a registered valuer in the eyes of your lender or bank. In 2019 there were a total of 781 registered valuers in New Zealand, with Auckland having the most at 260. I link to previously registered valuers can be found here

aframe valuation

What is taken into consideration when valuing a property?

There are many factors taken into consideration when valuing a property, some of these are: 

  • Ratings Valuation (RV) – are used to give the valuer a base number. Market and property conditions will supersede the RV.

  • Location – The quality of the neighborhood, the surrounding houses and general condition of public amenities, roading and environment.

  • Land – how accessible, tidy and workable the land is. How easy is access and parking. Of Course the size in square meters is also factored.

  • Building – The size and condition of the buildings/houses/garages etc on the land. All aspects including the interior fit out, roof, cladding, foundations, joinery and insulation are factored in.

  • Chattels – These are items that are not removable from the property, like carpets, alarm systems, blinds, light fittings and ventilation systems.

  • Comparable Sales – Perhaps the most important factor a valuer will look at is recent sales in the area of similar properties. Expect to find a break down of these comparable properties within your report.

Are there alternatives if I can’t get a registered valuer to look at my property?

In recent years services like the ones offered by Homes.co.nz and Trade Me and OneRoof provide e-valuations. These values are derived through algorithms based on recent sales in the area and publicly available information. Each are defined within their products

FAQ’s

So, what is a property valuation?

A property valuation is an estimated value given by a trained and registered professional on residential or commercial property. A valuation could also be carried out on rural property, land or lifestyle blocks. In short getting a property valuation from a professional lets you know what your property is worth.

Whats the benefit of getting your property valued?

Often a valuation is required by your primary lender; the bank that you will be servicing your mortgage with. Your bank may need to add a level of certainty before they lend. Although not exclusively, banks tend to normally require valuations for first home buyers, and borrowers with low equity loans or private sales

In the case of private sales, a valuation is almost exclusively required. Without this, a bank cannot really know the market value of the property and there is the risk that their customer might be overpaying and increase the risk of the loan

Who is allowed to value a property and where do I find them?

Only a registered valuer is allowed to value a property. To be a registered valuer you have to hold Annual Practising Certificate issued by Land Information New Zealand (LINZ). In order for a valuer to gain an Annual Practicing certificate, they must pass an exam or hold a recognised certificate.

What is taken into consideration when valuing a property?

There are many factors taken into consideration when valuing a property, some of these are:

Ratings Valuation (RV)

Location

Land

Building

Chattels

Comparable Sales

Are there alternatives if I cant get a registered valuer to look at my property?

In recent years services like the ones offered by Homes.co.nz and Trade Me and OneRoof provide e-valuations. These values are derived through algorithms based on recent sales in the area and publicly available information.

Posted with permission from propertydirectory.co.nz