blog-img3

How Much Should I Pay For A House – 2010 Blog Highlights

Just how much should you pay for a house? This is really up to you to decide - BUT the more information you have to hand about the about the house itself, about comparable properties, about the state of the housing market, and about how all of these things will reflect on the value of the house - the more informed a decision you can make about the worth of a house.

A few Blog articles in 2010 touched on things that might help you work out the value of a house and here they are again for you to browse over:

1. How Much Should I Pay For A House?

This article has links to a number of resources you can use to work out market value and gives some tips and suggestions on what you should think about when you are working out the price you want to pay for a house. So if you are trying to work out the money bit check out the article ‘How much should I pay for a house?

2. The RV and House Price

The RV of a house can be a bit of a wild card when it comes to working out what a house is worth – sometimes it is best to ignore the RV altogether – while other times it can be spot on! In our article ‘Is the RV a price guide’ we tell all about what the RV is and how it can (or can’t) be use to determine market value.

3. What Are House Prices Doing?

There are many things that can influence the housing market – the state of the economy, interest rates and house prices themselves are the obvious ones. In this Blog article we point you towards some good analysis of factors influencing the housing market – there are some things in here that may surprise you! Check it out – ‘House prices in NZ – where are they going?

This is the last Propertytoolbox Blog article for 2010 – we will be back in the middle of January with some more great highlights from 2010 – and we are looking forward to bringing you some more meaty house buying information in the Blog in 2011. Don’t forget – you can always reference the house buying guide for good basic house buying advice anytime you need it. See you next year!

House Prices in NZ – Where are They Going?

So what direction are New Zealand house prices going? Over the last couple of months Quotable Value has reported a gradual trend of declining house prices all across New Zealand – is this the trend we are going to see for a while? Reading around, down, seems to be the general agreement for the direction of house price in New Zealand, by why? And how far down are they going to go? And how long will this go on for? I am leaving this one up to the experts to answer! I particularly like this article by Bernard Hickey from interest.co.nz. His thoughts are that NZ house prices have another 10% to fall and he gives 10 reasons why: 1. The cheap foreign credit has dried up. 2. Home loans remain unaffordable for most in the bigger cities. 3. New Zealanders are migrating to Australia again. 4. The property tax changes are hurting more than expected. 5. The developed world is de-leveraging from property bubbles. 6. NZ households have hit debt saturation point. 7. Our debt is relatively high compared to many others. 8. Rents are not increasing in most places. 9. Banks face even more funding pressure. 10. The baby boomers will start selling down their houses and rental properties to free up cash. The article not only has food for thought but also references some great resources. So check it out now Opinion: 10 reasons why New Zealand house prices have another 10% to fall – by Bernard Hickey. But don’t let all this doom and gloom put you off buying a house! Check out our house buying guide, it has all the tips, advice and information you need to make a great house buying decision!

Where Can I Find a Valuer?

Propertyvaluationnz.co.nz is a great place to find a property valuer. The website profiles property valuers in your area and includes information on experience, costs and the valuation service they provide.

The majority of valuers are also listed in the yellow pages. The listings include individuals and companies, as many valuers work for themselves, but many do work for larger valuation companies.

You can also go to the Property Institute of New Zealand (PINZ) website. Here you can find a list of registered valuers in your area.

If you need to get a valuer, these are good places to start. Recommendations from friends are also a valid. But do not use recommendations from your real estate agent for a valuer! Your real estate agent is not independent from the process so it is best to avoid them as a source of valuer recommendations.

The great thing about the Propertyvaluationnz.co.nz property valuer profiles is that the essential questions to ask when choosing a property valuer have been asked (and answered) for you. Find out about the right questions to ask when choosing a property valuer here.

__________________________________________________________________________________________

 

How Does The Valuer Work Out The Market Value?

A property valuer combines all their knowledge and experience with their observations and research undertaken on the a property and its surrounding area, and comes up with a market value.

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 - and will note 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.

Find a Property Valuer in NZThe valuation is not guesswork! A lot of analysis goes into a valuation report. A property valuer has to be confident that they are right, as people depend on their assessment and, legally, they can be held responsible if they get it wrong.

Valuers can also help you out with estimations of what a house could be worth after planned renovations. You can provide a Valuer with a brief of your plans and they can give you a post renovation estimate of worth that can help you work out if an investment in renovations is worth it.

__________________________________________________________________________________

How Much Should I Pay For a House?

The house you are interested in may be marketed with or without a price - the only thing the price indicates is the vendor's expectations. Whether these expectations are realistic, is for you to decide. You may think you have a good idea of what a house is worth, but it never hurts to do a bit more research.

If you want to get the experts in, a registered property valuation can be done and costs from $500. If there have been some sales in the area that you think were comparable, ring the listing agent. If the sales are now unconditional agents should be happy to tell you what the sale prices were.

If you want reliable house sale information Quotable Value (QV) has some great online resources - some of the information available on this site is free to access.

We recommend you buy a recent or local sales report from QV as these reports will give you the addresses of a number of recent sales near your chosen address.

Take the report and go for a drive, note the differences you can see between the houses. Take into account, location, street appeal, exterior presentation and building type. The reports will give you floor area, age, rateable value, sale price and sale date, and you can use all this information to compare houses and to make up your mind about price.

The online 'valuer' reports do not give an accurate enough estimate of market value to be relied on, but they can be useful as they contain an 'all you need to know' range of information about a house which includes comparable sales, sales history and more.

Sometimes the rateable value (government valuation of the house) has a strong relationship with price for an area i.e. in Palmerston North, in February 09, houses were selling within 1% of their rateable value. In areas like these, the rateable value can give you a good idea of price. But you should only use the rateable value in combination with other information, like your own experience or a registered valuation. You can find out rateable value information on your local council's website for free.

Before settling on a price, make sure you have done a second inspection and checked around the house again, as you may have missed something that significantly affects the value. Here is our second inspection checklist to help you out.
 
 




 
 

__________________________________________________________________________________