It’s important to do your homework before you decide on the asking price for your home. There are several sources of information you can use to work out what your h
ome might sell for.
Your rateable value
The rateable value (RV) provided by your local authority is not necessarily a good guide to what your home might sell for. Some homes sell for a lot more, or less. The value does not include chattels, such as carpet, drapes, light fittings, appliances and built in items that can add to the saleable value of your home.
Your real estate agent
Most agents are happy to do a free appraisal to give you a price they think it would sell for. While an experienced agent will have a good idea of the current market, it is still only their view and different agents could have quite different views. Some may tend to give a higher price to encourage you to sign up with them, while others may give a lower price because it makes the home easier to sell.
Other recent house sales
Try to find out what other homes in the area have sold for in recent months. You can buy this information from QV (Quotable Value). Your real estate agent can provide similar information from the REINZ (Real Estate Institute) database. You could ask the agent to show you similar homes for sale in your area, so you get a feel for the ‘competition’.
Registered valuation
Getting a valuation from a registered valuer may cost $500-$800, but it can be a good guide to how much your home is likely to sell for. The valuer will look at the features and condition of your property, as well as what similar properties in the area have sold for. Ask your lender who they recommend you use.
A registered valuation can be a useful negotiating tool. You don’t have to tell the agent or anyone else what the valuation is, but you can indicate that an offer is under valuation and needs to come up. Or if you are happy to accept an offer at the valuation price you could offer to share the valuation report with the buyer if they share the cost with you.
What will a buyer pay?
Many people think their home is worth more than it really is – but in the end it’s only worth what a buyer will pay. If you overprice your home you could put genuine buyers off. And if a home is on the market for a while without selling, buyers tend to wonder what’s wrong with it. So it pays to be realistic about your sale price at the start.
Is your home hard to value?
If your home has features that set it apart from other homes, such as a view or waterfront location, it may be hard to decide on a sale price. It may be better to sell by auction or tender because you don’t have to set a sale price – instead the buyers bid or tender what they are prepared to pay.
Do you have a large section?
It will increase the value of your property if your section can be subdivided. Check it out with your local authority and if subdivision is possible tell the valuer and agent.