If you're thinking about buying or selling a home, you'll want to know what it's worth. You want some idea of what someone might pay for the property and what other factors might influence its price.

You'll probably start looking at getting an appraisal or a valuation. What's the difference, and which one should you get?

What is a Property Appraisal?

A property appraisal is an estimate of what a property is worth based on a number of factors considered. Because many of these factors are external factors – and they don't necessarily relate to features of the property itself – this type of appraisal is often referred to as a market appraisal.

A property appraisal, or market appraisal, is usually done by a real estate agent.

Factors Considered in a Property Appraisal

There are many factors that influence what a property is worth. These include:

• Location – where a property is situated can have a huge impact on its value
• School zone – related to the issue of location, the school zone(s) that a property is in will affect its perceived value
• Proximity to transportation – buyers will often prefer a home that is close to public transport, or that has easy access to major routes or motorways, so this will affect a property's value
• Land size – generally speaking, the more land, the higher the value of the property (especially of the land is large enough to subdivide)
• Land condition – property value can be affected by whether a home is on a flat section or a hilly one
• Orientation/aspect – we Kiwis love our sun, so north-facing properties will often have a higher value than others
• Condition/quality of build – as you can expect, a home that needs repairs or maintenance will have a lower value than one that is newer, in better condition or with recent renovation work done
• Comparable properties – the value of your property will be affected by what other properties on your street and in your neighbourhood are worth.

How are Property Appraisals Conducted?

A property appraisal can be done in person or online. Bear in mind, however, that an online appraisal will be a very loose guide to what a property is worth. At Lowe & Co, we would need to update this to an in person appraisal if your steps to seriously considering selling your property came about.

An agent will visit your home and conduct an inspection. They'll look at the size and condition of your home, the size and orientation of your section, the location of your property, and other factors relating to your property.

They will also take into consideration what else is happening in the market, specifically in the area where you're selling. And they'll review recent sales prices and statistics.

With all of this research and analysis, they will give you a report that summarises their findings and provides an appraisal for your property.

Cost of Property Appraisals

A property appraisal is free from real estate agents. At Lowe & Co, we offer property appraisals for clients at no charge, and it's a great way for us to get to know each other.

If you're thinking about selling, let us know and we can conduct a market appraisal for you.

What is a Property Valuation?

A property valuation is done by an independent, registered property valuer. Their assessment of your home is more thorough than a market appraisal, containing very specific and detailed information about your property.

A property valuation is a document that a bank and insurance company will ask for if you are purchasing a property.

How are Property Valuations Conducted?

This type of review cannot be done online. A registered property valuer will visit your home in person and do a thorough assessment of its condition.

A valuer looks at:

• the state of the home
• the size of the home
• the number of bedrooms, bathrooms, etc
• any work or improvements done
• any repairs that are needed
• the size of the land
• recent past sales figures and prices for homes in the area

A property valuation is a less subjective assessment of how potential buyers might value the home, neighbourhood, school zones, etc.

Cost of Property Valuations

The cost of a property valuation will vary depending on where you are in New Zealand. The price is generally higher in the larger cities.

Because it is conducted by a registered professional, costs generally start from approximately $1200. 

Do You Need Both an Appraisal and Valuation?

A property appraisal and a property valuation are used for different purposes. You do not need to get both.

A property appraisal is used by the vendor selling a property. It gives them an idea of how the market will perceive the value of their home, and it helps them set the asking price.

A property valuation is usually needed by a buyer interested in purchasing a property. It gives them detailed information about the property that will help them decide if it's worth purchasing. It will also help in the process of getting financing and insurance for the home.

When and How to Request a Home Appraisal

You can obtain a property appraisal from a real estate salesperson at any time for your personal interest, but if you are considering selling, a salesperson is legally required to provide you with an appraisal before you sign an agency agreement. 

Having a home appraisal conducted by a real estate salesperson experienced in your region will give you a good indication of what to expect through the sales process.

A home appraisal will also let you know what improvements or changes you may need to make to get your property ready for sale. For example, if there is renovation work or repair work that you've been thinking about, a knowledgeable real estate agent can give you advice on whether it's worth doing before putting your home on the market and how that work might improve the selling price.

Key Criteria for Selecting an Appraiser

When selecting someone to be your property appraiser, there are some key things to look for:

• Do they have extensive experience in the geographic region where your property is?
• Have they sold many homes in the area, with enough statistical data to help them accurately appraise your property?
• Do they have a wide network of contacts or a large database to use when assessing the market?
• Do they know much about school zones and past sales in your area?
• Are they professional, friendly and helpful?
• Do you receive exceptional service from them?

The team at Lowe & Co has the experience and expertise across every suburb in Wellington to help accurately appraise your property and get it ready for market.

If you're buying or selling property, talk to the Lowe & Co team today. We can guide you through the process of getting an appraisal or valuation, depending on what's appropriate for your circumstances.