Article: Speak Easy

Can The Internet  Really Know The  Value of  My Property?  with Michael BoturCan The Internet Really Know The Value of My Property?  with Michael Botur estimates the market value of my house at $380,000.

TradeMe Property estimates the market value of my house at $60,000 less.

Last time looked why such different market value estimates were being generated, it found an example where one Lake Terrace property in Taupo was given on as having a market value of $1.2m, whereas TradeMe Property valued it at $420,000.

The opinion of a registered property valuer is only an opinion, sure – but it’s an opinion far better informed than online tools. Registered property valuers have to study towards a degree such as Bachelor of Applied Science or Bachelor of Property and be members of their professional body, the Property Institute of NZ.

The BProp is more than just an opinion – those with the qualification have to complete papers in marketing, management, valuation, finance and investment, economics, law, land use planning and controls, and building/construction. Then the graduate looks to join either the Valuers Registration Board, Property Institute of New Zealand, Real Estate Institute of New Zealand or even the Royal Institution of Chartered Surveyors (UK).

Whangarei valuer Reuben Archer of Property Indepth said the computer model which uses – which is certainly well-informed and based on cuttingedge data – can give estimates majorly out of line with what a valuer will conclude based on a real up-close visit.

That’s not surprising considering the computer can’t actually go inside a person’s house. “I had a case yesterday in which there was push-back because I gave some people a valuation figure 10-20 grand less than what they’d read online,” Reuben says. “Computer generated models don’t factor in the state of the house. They don’t indicate what maintenance needs doing.”

Although a home valuation inspection may reach conclusions in just an hour, those conclusions can be life-changing. In 2015 my wife and I were close on putting in an offer on a house on the steep, steep Raumanga Valley road… til we had it pointed out that the previous owner had undermined the house to scrape a cave in which to put a sleepout with non-consented piles keeping the house above from crushing us.*

Online data could never have shown that.

Reuben says the inspections his team do look at a property’s age and condition, its size, whether it’s been modernised, had upgrades to kitchen and bathroom and where it’s located. While online property valuers have no trouble with up to date information about sales in the area and rateable values, “Computer models work better in big cities than in rural areas where uniqueness leads to big variation in market value,” Reuben reckons.

And lastly, to dispel a few myths about property valuations:

MYTH: Rateable value is lower than the market value
ACTUALLY: Property valuers come across plenty of examples in which a rateable value is higher than the market value put on a place.

MYTH: I can get my buddy to do my property valuation for me
ACTUALLY: Valuation panels commissioned by the lender (bank) select a suitable valuer impartially. The valuation jobs are spread between firms, allocated based on the number of valuers within each firm. “This came out after the Global Financial Crisis around mortgages – if you have a mate that’s a valuer, barriers are put in place so they don’t jack up the valuation,” Reuben reckons.

MYTH: There’s no point getting a valuation on a property done during winter.
ACTUALLY: It’s just a case of whether or not you have got your property looking purdy. Fighting to get a house looking valuable during winter can be an uphill battle, but it’s not impossible.

*I can’t remember if the valuer or the LIM pointed out the flaw, but it’s a good anecdote anyway.

Michael Botur has published journalism in NZ Herald, Herald on Sunday, Sunday Star-Times and Mana and he writes a lot of fiction. He moved to Whangarei in 2015 and was ecstatic to be able to afford a house here.

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