The Registered Property Valuation Guide
Whether you are selling or buying a house, using a property valuer can be invaluable when working out the market value.
Do you just need to know where to find a property valuer? Or are you wondering how property valuers come up with the market value? Before you get a property valuer, here is all you need to know about registered property valuations and valuers.
Looking for a property valuer?
What is a registered property valuation of a house?
Need to get a registered valuer? Who are registered valuers?
How does the valuer work out the market value of a house?
My bank wants a valuation - why?
How much will a registered property valuation cost?
Where can I find a valuer?
Questions to help you find the right property valuer
A property valuation as a condition of sale
What is a registered property valuation of a house?
A registered property valuation is when a registered property valuer makes a determination of the market worth of a house or property.
A registered property valuation can also be known as a registered valuation, a house valuation, or just a 'valuation'.
For home buyers, the most common reason to need a registered property valuation is because your bank has requested one as part of your finance application and approval i.e. as part of your mortgage application. Head this way to find out more about registered property valuations, or to find out why your bank wants a property valuation.
Who is a registered valuer?
A registered property valuer is a university educated professional with a 'valuation' specialisation. The have been trained to an expert level in property valuation methods and have at least a number of years of experience in valuing property.
Want to find out more about what training registered valuers are required to do, what experience they would have had before they value your house and what other housing related knowledge they have head to Propertyvaluationnz.co.nz to find out more about registered property valuers.
A great resource is the Propertyvaluationnz.co.nz registered valuer profiles. Each valuer profiled has listed their qualifications & experience - these profiles provide an insight into the registered property valuer profession.
How does the valuer work out the market value of a house?
A property valuer combines all their knowledge and experience with their observations and research undertaken of the property and its surrounding area, and comes up with a market value.
A full inspection of the house inside and out is done by the property valuer. They will usually spend about an hour inspecting an averaged sized property. This inspection will include measuring and viewing the entire property - but does not usually involve the extent of inspection that a building inspector would complete.
A property valuer will also do some 'desk based' research - amongst other things checking the title, perhaps referring to council zoning maps, or consulting the resource management act. The most important part of determining the market value is analysing other comparable house sale statistics - these statistics are the basis of how the market value is determined.
To find out more the property valuation inspection - and more detail on how the property valuer works out the market value go to Propertyvaluationnz.co.nz and check out the resources section for more information.
My bank wants a registered valuation
A registered property valuation is the way your bank gets an impartial, independent expert opinion on the value of the house. They are about to lend you a large amount of money, using the house as collateral, and if it comes down to a worst case scenario they want to make sure they will get their money back.
For a start banks generally only lend 80% of the value of the house - but take the whole house as collateral - this gives them a nice buffer. But banks do sometimes lend up to 100% of the value of a house - it is even more important in these cases for the bank to get the value of the house correct - and this is where a registered property valuer comes in. Find out more about why your bank wants a registered property valuation here.
Registered property valuation cost
Property valuation costs vary and often depend on many things including house size, and location. A property valuation is usually between $500-$800.
To find out actual costs of property valuations in your area, check out the Propertyvaluationnz.co.nz property valuer profiles. In the profiles, each valuer has provided a cost for their house valuation service.
Want to find out more about why property valuation costs vary?
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 yellow pages also list your local property valuers.
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 more about the right questions to ask when choosing a property valuer here.
Questions to help you find the right property valuer
In addition to asking to see a sample report, here are some questions to ask your prospective valuer:
Q: Do they normally do residential work, and if so what experience do they have?
A: You will get the best degree of accuracy with the valuation if you can choose a valuer with experience with the type of property you need valued. Some valuers specialise in commercial or rural properties.
Q: How well do they know the area of the property?
A: A familiarity with the area will give the valuation a higher degree of accuracy.
Q: Do they fully inspect the property (measure the size of the property, report any defects, etc)?
A: You should expect this from your valuer.
Q: When can you expect their report? And how will it be delivered?
A: The valuer should be very clear on the timelines for their reports. Most valuers will be able to provide a report within 4 days. If it is urgent, these requests can often be accommodated. You will need an original paper copy of the report sent to you (this is the only thing that your bank will accept). Getting a pdf version of the report also is great as it is convenient and fast.
Q: Do they have any alliance or association with any of the parties involved?
A: Valuers have a responsibility to disclose information that could be considered to affect their ability to provide an unbiased report. If there is a close conflict of interest, the valuer should refer you on.
Q: Do they hold professional indemnity insurance?
A: Your valuer must be insured.
Q: Are they available to discuss the report once completed (for example if you have any questions)?
A: All valuers should be willing to go through the report findings with you and back up any findings.
In the Propertyvaluationnz.co.nz property valuer profiles these essential questions have already been asked of your local property valuers - making it quick and easy for you to choose a property valuer.
A property valuation as a condition of sale
If you want to get a registered property valuation as a condition of sale, you need to state this in the conditions section of your sale and purchase agreement.
Pay attention to the wording of this clause - you want to make sure that the clause is only satisfied if you are happy with the valuation - not anyone else.
Allow yourself at least 5 days for satisfying your property valuation condition as a property valuation done by a registered valuer usually takes 2 - 4 days to complete.
Allowing at least 5 days will give you time to get your property valuation organised, completed and sent to all who need to see it i.e. your bank or lender.
