How to value your home

Before borrowing money to carry out work such as adding a new bathroom, it's wise to have your home professionally valued. Photo / Getty.

If you are thinking of selling or looking to raise finance to buy or renovate, you are likely to start by finding out the value of your property.

If selling you may want to put an asking price on your property or will be asked to set a reserve for an auction for the lowest amount you are willing to sell for. If buying, you may want to know how much you will need to bid or offer to buy the property.

There are various ways to get an idea of a property's value. If you need to raise finance your bank will most likely ask for a registered market valuation report. This involves a full inspection of the property by a registered valuer, and you will receive a comprehensive written report including measurements and photographs as well as market research and a comparison of recent sales of similar homes in your area.

You can find out more about this type of valuation at qvhomevalue.co.nz.

Your bank may also generate an automatic estimate of your home value themselves. If you disagree with this you may choose to get a full market valuation report.

If you live in the Auckland region, your council rating value (RV) also known as your capital value (CV) may seem low in comparison to what you think your property is worth.

This is to be expected as rating values for Auckland were last set in July 2014. The QV House Price Index shows the average home value across Auckland has increased by more than 43 per cent since then.

This means you can't look to your current rating value as a guide to what your home is worth in today's market. In most cases the sale price you would achieve today could be hundreds of thousands of dollars higher than your 2014 rating valuation and this is to be expected given the significant value growth since then.

It's important to remember that rating valuations are fit for purpose valuations carried out on all properties in New Zealand, usually once every three years and are just one of the factors local councils use to set rates for the following three-year period.

They are completed using a mass-appraisal approach, and don't include chattels or improvements you may have made to your property that did not require a building consent such as remodelling your bathroom or kitchen.

These improvements will only be reflected in your rating value if you let Auckland Council know. You can update your home details and send the latest photos through the QV homeguide APP. Rating values in the Auckland region will be updated in 2017.

Of course the price a property sells for is what someone is willing to pay and it may actually be worth more, or less, than what it sells for on the day.

But it's important to do your research and understand the expected market value before you apply to borrow against it, put it on the market or look to buy.

- Andrea Rush QV National Spokesperson