ADVICE ABOUT GETTING A PROPERTY APPRAISAL
When preparing to sell in a property, it's important to be aware of industry expectations of property appraisals before signing a real estate agency agreement. These are designed to protect you.
1. Accuracy: An appraisal estimate of a property's market value is often the deciding point about whether to sell or not, so the accuracy of this rates high in terms of importance. Done well it's a good starting point but use the tips below to scrutinise the price range or value a real estate agent has provided.
If you need a shortlist of vetted real estate agents first, request now - it's a genuine free service.
2. Competence: The difference between a property appraisal value at the outset and a sale price at the end depends on the experience and competence of a real estate agent for the property type and location. Be careful who you choose.
3. Avoid Price Reductions: Ensure the accuracy of your intended sale price and use these tips for selling a house to aim for more, rather than over-estimating the sale price at the outset and ending up with a price reduction.
4. Legal Obligation: A real estate appraiser is obliged under the Real Estate Agents Act 2008 to establish an accurate sale price range with which to advertise your house. That means not over-valuing to entice you to list with them.
5. Factual Data: A property appraisal is primarily based on recent and current sales data, an inspection of your house and land, the location and the current real estate and economic climate. If your property is zoned for development, this will need to be factored in.
6. Searching by price: Even if you decide to advertise your house for sale without a price and choose an auction or tender, a property appraiser will still have to enter a price range into websites. This means when home buyers are searching for properties it will show up in the right price search range.
Real estate appraisals should be tailored to different property types.
WHAT EXACTLY IS A PROPERTY APPRAISAL?
A property appraisal is a legal document prepared by a licensed real estate agent, the appraiser, for the purposes of informing you about what you could expect in terms of a sale price in the current market and how they would go about achieving that.
Appraisals are provided by real estate agents free (but if it’s inaccurate it can end up being costly).
What to expect in a real estate appraisal:
- An appraisal must be provided to you in writing by a licensed property appraiser. Verbal appraisals are not acceptable, ever.
- It must realistically reflect current real estate and economic market conditions.
- It must be supported by comparable information on sales of similar properties in similar locations.
- Where no comparable data exists, the real estate agent must explain this in the appraisal document.
- The price used to advertise your house for sale must be reflective of the price expectations agreed with you as the vendor.
- Any amendments to an advertised sale price must be approved by you in writing. Keep your eye on the ball.
THE PROPERTY APPRAISAL PROCESS IN STEPS
A professionally vetted real estate agent provides a home seller with greater confidence in getting an accurate sale price indication. This is what we do and is a free service for New Zealand home sellers.
It is recommended that you get at least two property appraisals so you can compare services and costs.
We can provide information about keeping all your real estate costs to a minimum including commission and fees.
Once you have decided which real estate agent or agents you would like to appraise your property they will visit and you can give them the guided tour.
BE UPFRONT ABOUT THE PROPERTY CONDITION
If there are any issues related to the integrity of the house or unconsented improvements, don't hide this because it will be found when a buyer exerts their right to have a property inspection carried out as a condition of sale. Rule of thumb - no surprises.
Property sales often fall over when meeting conditions - and just after the excitement of signing a sale and purchase agreement - because a property inspector finds issues. A total waste of all your efforts and advertising costs.
It is always best to disclose what you know and ensure you have a real estate agent who can manage the issues competently for you. This is standard practice in real estate today.
Once you have reviewed all appraisals and met with each property agent you will be able to compare them using Agent Finder NZ's questionnaire. Users of our questionnaire are the most informed home sellers in New Zealand.
"We are very relieved and very happy with our real estate agent, thank you for your recommendation and your help. Both of you have helped make it a relatively stress free and painless process.
The agent managed to get us a good pre auction offer so it has happened very quickly. We are all happy. Thanks again." - Nick
Article updated May 16, 2022 | Trish Willis | Member of Property Institute of NZ (IPAC)
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- Best Estate Agent Vetting Service New Zealand 2018
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