It’s a known fact that property values go up and down, and these trends are normally seen right across New Zealand. This is especially evident in times when the real estate market is doing badly; however, the current market is hot and property values are still on the rise.
Even in stable times, slight fluctuations occur that could impact the value of homes considerably.
Of course, you can do what needs to be done in order to build equity, be it paying your monthly installments regularly or even keeping your home in ‘mint condition’ (for lack of a better word).
It’s the best thing to do if the housing market in your area is in shambles while you wait for things to improve in the long run. This is especially true if you wish to sell your home for a sizeable profit.
That said, it’s still a good idea to understand what the real estate value of a home is, given that it isn’t as simple as one would prefer.
So, What Is My House Actually Worth?
As mentioned earlier, determining the value of one’s home isn’t as simple as you think. The reason for this is that there are 4 components providing property values, whether in Auckland or just about anywhere else in New Zealand. Before we look at them, it’s important to consider all of these values before planning to sell your home.
The first is the capital value or CV of your home, provided by the local council in order to set rates for selling. It’s a free evaluation, sometimes referred to as the ratable or government valuation.
The second value is its market value, the price you’d get if you decided to sell your home today.
The third is the registered value, offered by a registered official for a fee of $500. Most times, this evaluation of the property’s value is determined on order to either obtain or refinance a loan on the said property.
Finally, the rebuild value of your home is its value if it is destroyed in a disaster; this is the sum you will receive to rebuild your home. You can get a professional estimate of this value for a fee of approximately $500.
One thing you do have to keep in mind is that these property values can vary widely from home to home. This is precisely why a number of homeowners wonder why their capital value is much less than what their house is really worth.
For the most part, and for more reasons than not, this capital value is usually compiled using statistics derived from settled sales, which are incomplete. Moreover, your council does not visit each home but indexes your home against home with the same size, location, or type.
Most of all, even if you’ve carried out refurbishments, this doesn’t get added to the value of your home, as the time between each evaluation is considerable.
Since you can object to the capital value being too low, as the case usually is, the best approach to determining the current property value is by its registered value (which for obvious reasons isn’t free of cost).
In Closing
So, which of these property values should you consider when selling your home?
Despite all the valuations that are on offer, it really all boils down to the amount you’re willing accept and the amount being offered by the buyer.
Of course, this is where trusted real estate agents such as Sherelle and Don can come in, given their consistent track record in making deals best described as “win-win situations . . . for both parties”.
