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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.


What is a Pre-Purchase Building Inspection?

A pre-purchase building inspection is a visual, non-invasive inspection of a property. A building inspection is also known as:

  • A house inspection
  • A building survey

The inspection attempts to identify significant defects, overdue maintenance, future maintenance issues, gradual deterioration, inferior building work, and/or other areas of concern. The building inspection takes into account that you are doing the inspection with the intention of buying the house, and the inspection focuses on details relevant to this decision.


Why Should I Get a LIM?

If you are putting in an offer on a property, you should make a satisfactory LIM report a condition of the sale. A LIM is very useful in helping you decide whether the land is worth purchasing. From a LIM you can determine whether the property has permits for all its building work, what zoning it has, whether it is free from any restrictions, what proposed local developments may affect the property, and whether the intended use of the land is feasible.

A LIM may contain all sorts of information that can impact significantly on your perception of a house's value. For example, resource consent may have just been issued for a building that will block your view, there may have been a history of flooding or subsidence, the land was previously a landfill site, or alterations to the house may not have a building consent.



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.



Will The Building Inspector Spot Everything?

Building inspectors can't guarantee they will find everything wrong with a building. They are limited to a visual inspection of a building unless the owner agrees to remove such things as wall-linings or floor boards. That is unlikely, so the building inspector will only check areas of the building that have safe and unobstructed access.

An inspector can't guarantee the building meets the Building Act and/or local regulations so will not check to see if the council has issued any resource consents, building consents, code of compliance certificates, etc for any work carried out to the property. But they can identify building work that is likely to have needed a building permit.

Information about permits and consents can be found by searching the council records or ordering a Land Information Memorandum (LIM) from the council. For an additional fee, some inspectors will look at the property records held by the council and prepare a special report on the findings.