In the current ‘hot’ property market, buyers are finding there is a fair amount of competition and that many houses are being marketed without prices and through closed tenders.
This makes determining a fair bid price and value for your dream home rather difficult doesn’t it!
However, there are ways to help you prepare for this – what tools do you have available? There is no silver bullet, and it is often a mixture of ways which can determine the value, but this is a good place to start:
- GV (Government Valuation) is one ball park tool, but many houses are now selling over the GV. Some buyers like to work out the average percentage over a GV (in a particular suburb) that houses are selling for as a means to determining a ball park value.
- Comparative Market Analysis (CMA) reports can provide a broad outline of sales in the area and may have an appraisal value range of the property. The selling real estate agent may provide you with a copy of this. We provide our mortgage customers with free CMA reports giving sales in the area, houses on the market and an indicative value range based on basic online statistics.
- Buy an E-Value from QV – this is similar to, but sometimes a bit more accurate than the comparative market analysis above. Banks often use these for checking a house value and will cost around $50. You can also look at the QV House Price Index on their website for an indication.
For example – the average house value for September, 2016:
Kapiti Coast District – $448,253
Porirua City – $453,069
Wellington City – $661,927
- Check websites such as Homes.co.nz that can show indicative online values and recent sales. It also has a birdseye view of the house values surrounding the one you are looking at.
- Ask the agent – a bit of probing may bring out a minimum expectation or assumption of what the house will sell for.
- Obtain a registered valuation where a valuer will do a site visit and prepare a detailed report. This will cost around $600 and may actually be a requirement of your finance approval too.
Once you have looked through the tools available, and consulted with a financial advisor, it will help you make an informed decision – albeit not a guaranteed figure of the value on the day though. If it’s a house you really want, be aggressive within your budget and finance approval – trying to haggle a ‘deal’ may lead to disappointment!