Valuation

What’s the difference between a Rating Valuation and a Current Market Valuation? Well, it can be confusing, these are two of many types of valuations that buyers and sellers might see. What the difference?

You might need a valuation for a property when you’re  thinking of buying or selling, but there are other reasons to get your property valued, for example, you may wish to borrow money or insure your property and for this you’ll need a Current Market Valuation.  And your local council levies their rates based on the valuation of your property called a Rating Valuation (RV), up until a few years ago it was called the GV or Government Valuation. Occasionally there are disputes over property, for example matrimonial disputes, commercial disputes and other issues that require a valuation.

Let’s look at the GV or your rating valuation:

Council Rating Value

The RV (rating value) used to be called the GV (government valuation) and sometimes the QV (quotable value) and is legally required under the Rating Valuation Act 1998. It’s for calculating the city council rates and is done every three years. It is not a current market valuation, and often has little resemblance to the selling price of a property.

The Current Rating Valuation is calculated by Quotable Value Ltd, using computer models of both land and improvements. Usually, they don’t visit the property, and very rarely inspect the interior. The condition, maintenance and improvements to a home are not known unless reported through council records, and a building permit issued for improvements. The valuation has three parts:

Land Value: This is the probable price that would have been paid for the land at the date of valuation, and includes any development work that has been carried out. It’s calculated on a square metre basis, ie a larger section has a higher value than a smaller section, regardless of the fact that it may just be a single house site.

Capital Value: Assessment of probable price that would have been paid if it had been sold at the date of last valuation.

Value of Improvements: This is the difference between land value and capital value. It does not represent replacement cost, or reflect that a house is poorly or well maintained, or may have unresolved issues such as “leaky home” or lack of a Code Compliance Certificate.

Current Market Valuation

A registered valuer carries out a full inspection of your property, noting the condition of the property and the state of the maintenance, including the size of the home and any related buildings. Local knowledge of the area, including community amenities, is noted. An assessment of recent sales of similar properties is made and compared with the property to arrive at a valuation.

Most banks and lenders will require a current market valuation from a registered valuer if you are borrowing more than 80% of the value of your property. Sometimes that ratio can vary according to market changes and your personal situation.

What’s in a Current Market Valuation?

It should have:

A copy of the title

A description of the property

The current market value

A mortgage recommendation

A description of the locality and associated amenities

A report on recent sales in the area, including addresses, prices and descriptions

Valuers

Your valuer must be:

A member of the New Zealand Institute of Valuers and/or the Property Institute of New Zealand. I would recommend a local valuer, rather than a valuer from another part of Auckland or New Zealand. Valuers offer other services and you should ask if you require a Commercial Valuation or an Investment Valuation, or require mediation in the case of a dispute over the value of a property.

Here’s a couple to try:

Liam Lyons has been valuing property on the North Shore for as long as I can remember, is well respected and very helpful; call his office on 09 489 5329, or visit the Lyons and Co website. They are right in the heart of Takapuna in Anzac Street.

Prendos offers a wide range of services including  property valuation, building and quantity surveying, remedial design and administration and dispute resolution.

Prendos is a leader in property advice and design remediation of defective buildings.  They provide the full range of property evaluation, building performance and condition and failure assessment.  Dispute resolution services include arbitration, adjudication, mediation and expert evidence from leaky buildings to property condition and lease disputes. You can contact Tony Carlyle on (09) 486 1973  (ext 718) or mobile: 021 482 320 or go to the Prendos website. Their office is in Barry’s Point Road.

Valuation of Rental Properties

You should be able to get a written assessment of potential rental returns from any property manager. They will look at what similar properties in the area are being rented for and take into account market trends. You’ll find Lizzie Simanke here at Harcourts Milford really helpful on 021 366 339 or Dennis Hopkins at North Shore Rentals Ltd. Again Dennis has been around longer than I have and that’s saying something! His contact number is 09 489 2651 or 021 929 171.