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  • What is a Valuation?

    A valuation is Registered Valuer’s professional opinion of how much a property is worth. If you are a buyer, a valuation report gives you comfort that you are not paying too much and if you are a seller, you are not letting your property go too cheaply.  A valuation will generally be required by your lender if you are borrowing more than 80% of the purchase price of a property.
  • Is a registered valuation different from my (RV) Rating Valuation (formerly Government Valuation or GV)?

    A Rating Value (RV) is undertaken by local authorities to establish relative property values at a specific point in time to enable council rates to be assessed. All local authorities in New Zealand reassess property values every three years. Values are derived using statisticalmethods and, as a rule, most properties are not inspected. Registered valuations are different in that the property is inspected by a qualified person and a value current to the day of inspection is determined.
  • What happens when I order a Valuation?

    Your valuation instructions are forwarded to one of our Valuers who will make contact withyou. We need to: (1) determine the purpose of the valuation; (2) if you are borrowing to purchase the property the name and address of the lender; and (3) access instructions to the property. Generally if you are purchasing through a Real Estate Agent the latter will give the Valueraccess into the property.
  • Does the Valuer need to inspect the interior of the property?

    The Valuer cannot ascertain the internal condition of the dwelling without an internal inspection.  The internal condition of the dwelling is an major factor contributing to overall Market Value. It is very rare for a valuation to be produced without an internal inspection. The only possible exception might be a mortgagee sale where a disgruntled mortgagor denies the Valuer physical access to the property. In these rare instances the Valuer will tend to err on the side of caution and produce a very conservative estimate.
  • I had my property valued eight months ago and now my lender wants an update, why is that?

    You want to vary the terms of your loan such as borrow additional funds. Property valueschange over time. A valuation generally remains current for 6 (six) and in some rare cases 3 (three) months, after which the lender will cease to rely on it.
  • Do I need to pay a full fee again for my updated valuation?

    VCL will provide an updated report for a discounted fee. The quantum of discount depends on how long ago we produced the original report. In any event the property will need to be re-inspected to determine whether there are any changes in condition and we will reanalyse the most up to date sales evidence to determine current market value.
  • I wish to have more than one property valued, do I get a discount?

    If you want to have more than one property valued at the same time we will generally negotiate a reduced fee on the second and subsequent properties.
  • Who does my Valuation need to be addressed to?

    This is dependent on the reason for or purpose of the valuation. If the valuation is to be used for lending purposes it needs to be addressed to the lender (this person is called the addressee). If it is for personal needs then the addressee is yourself, the client.
  • Who cares who the valuation is addressed to, why does it matter?

    You will note that all valuation reports whether it is from VCL or any other valuation firm only accept liability when used by the addressee. Liability is disclaimed if the report is used by any other party. This follows a basic legal position called the Hedley Byrne principle. In simple terms this in effect stops an unrelated third party from picking up the report without authority and using it for their own purposes without the consent of the valuer. Therefore, unless the specific lenders name is on the report the bank cannot rely on it for lending purposes.
  • What do I get for my money?

    VCL will produce two copies of a 7-10 page report which will include:  the current market value; comprehensive property and legal description; comparable sales information; copies ofthe Certificate of Title and a colour photograph of the property.  If you are using the valuation for mortgage purposes we will send the original report directly to the lender with a copy going to you.
  • How long will it take to complete a valuation?

    For a straightforward residential valuation from inspection to the completed report is normally within one to two working days. This is dependent upon the Valuer gaining access to the interior of the property which is out of our control. For a commercial valuation, you need to agree to a specific completion date with the Valuer. Commercial and Industrial reports take considerably longer because of their complexity.
  • The Valuer’s Mortgage Recommendation in the report is less than the amount the bank is prepared to lend me?

    The Valuer’s Institute recommends that all valuations for mortgage purposes include a Mortgage Recommendation. For trustee lending this amount was limited to 66% of the market value of freehold property and 50% on leasehold, although these rules were subsequently relaxed.  The Valuer’s mortgage recommendation does not affect your level of borrowing, which amount is negotiable between you and your mortgage provider.
  • You did a report for somebody else, can it be addressed to my bank instead?

    It depends on whether: (1) the original client gives their permission and; (2) the Valuer has any conflict of interest. If those conditions are satisfied then we will readdress the original report to your lender with you as client.
  • Is there any charge for the above, after all you already have the paperwork on file?

    VCL will take you on as a new client for a discounted fee. There is a charge for the service of readdressing the report to a new client as we are extending legal liability to you and your lender where no such liability existed before. Our charges for this service are always fair andreasonable.
  • I want to have an up to date valuation, will your Market Valuation change my rates?

    No, a Market Valuation will not change your rates.  Rates are assessed based on the Council rating value, which is calculated once every 3 years.Council rating values are determined by their own contracted Valuers, in the Wellington region this is Quotable Value. VCL are an independent valuation practice, the report is confidential to you and the addressee so we do not share the information with the Local Authority.
  • How reliable is the Rating Value as a measure of market value?

    While RVs are based on market sales, they are a snapshot of the property market at a single point in time so as time moves forward from the revaluation date they become less relevant.The property is generally not inspected and statistical methods used to determine value can lead to anomalies between properties. Rating values specifically exclude chattels. If you are buying or selling we would advise against placing much reliance on RVs.
  • I think that my RV is wrong, how can I object?

    You must lodge an objection in writing before the closing date for objections shown on the front of your Notice of Rating Valuation. The objection can be either on an official form or in aletter. In your objection you will need to state the valuation reference number, the address of the property, a daytime contact telephone number, your mailing address, your reason forobjecting, and an estimate of what you realistically believe the value should be. You may appoint someone else, such as a Registered Valuer, to act on your behalf.
  • What happens if I lodge an objection to my RV?

    A Valuer acting on behalf of the Local Authority will contact you, and may arrange an appointment to inspect your property to verify the property records, and update them where necessary. The outcome of the decision on your objection will be advised to you in writing.
  • I’m still not satisfied with the decision, is there anything else which I can do?

    If you are still not satisfied, you may seek to have your objection heard by the Land Valuation Tribunal. You will need to pay a hearing fee. At the Land Valuation Tribunal hearing, you will be required to state your estimate of the value and provide evidence to support your claim. This evidence would normally be information about sales of similar properties which occurred at, or near, the date of the valuation being objected to. The Land Valuation Tribunal will make a decision based on the evidence presented.
  • What are Chattels?

    Chattels are items that do not form part of the real estate, they are items that the seller may choose to take with them. This obviously includes personal effects and furniture but might also include more unlikely items such as non-fitted carpets, curtains, etc.
  • Are Chattels important from a lending point of view?

    Clearly they are important to the purchaser in that it is prudent to establish which items form part of the sale and which items are to be excluded. From a lenders point of view, once as it is established that an item is to remain in the property, it is now less important than it used to be to differentiate between chattels and fixtures. A decade ago, most lenders would not take security over the chattel component of the sale in recognition that (a) a chattel had a much shorter life than the building itself; (b) they could easily be moved off site. However, in the present climate most mortgagees will lend on chattels as if they were part of the real estate.
  • What are fixtures & fittings?

    Fixtures and fittings are really the opposite of chattels and are regarded in law as forming part of the real estate. When the property is sold they must remain in place. The seller has no right to remove them whether or not they are specifically mentioned in the sale and purchase agreement.
  • How do I know whether an item meets the definition of a fixture or fitting?

    This is very much a grey area of the law and has been the fodder of many disputes. There are two legal tests that may be applied determine the status of an item. Firstly, the degree of annexation test says that the chattel does not become part of the land unless it is connected to the land or building in a substantial way. Secondly the intention of annexation test requires that the chattel has beenfixed to the land with the intention of permanently improving the land. Each item needs to be measured against these tests. For example if a cabinet is screwed to the wall it meets the degree of annexation test in that if it were removed it would damage the wall to which it is attached. However if the same item is resting on the floor and under its own weigh, it does not meet the test. The second test can be less objective. For example a freestanding stove must meet the intention test in that a cooker is vital to the operation of the household, but does a dishwasher meet the test? To avoid disputes relating to fixtures and fittings ensure that the items to remain in the house are itemised in the Sale and Purchase Agreement.
  • Note the next five FAQs are associated with construction loans

  • We pre-purchased and paid for the windows, kitchen cabinets and appliances and they are sitting in the garage. Can the Valuer take this into account?

    Until the various construction elements are fixed in place they do not form part of the lenders security. The simple test for this is the answer to the following question “can the items be easily removed from the site without damaging the property?” If the answer to this is “yes” then, legally, the items do not form part of the mortgagee’s security
  • We need to pay for the building kit-set prior to construction, will the mortgagee (lender) take security over this?

    This is always a problem for lenders and is really an extension of the previous question. Until the kit-set is nailed in place and forms part of the building it cannot form part of the security for mortgage purposes. Some lenders may make an unsecured loan over it, but that is between you and your lender. A similar problem arises with re-locatable houses. These do not form part of thelender’s security until they are affixed to the site.
  • We agreed to pay the builder 50% of the contract price upon completion of the framing, why has the Valuer only authorised a payment of 30%?

    To give an extreme example of this, you could agree to pay the builder 100% of the contract price before the job begins. However most people would agree that this would not be prudent. The Valuer is legally obliged to inform the lender how much value is affixed to the site at any given stage of construction. The value in place is guided by construction tables rather than what the client has imprudently agreed. For this reason we advise you to seek professional advice PRIOR to agreeing to a progress payment schedule. The same advice doubly applies if you are not borrowing but paying for the project out of private funds.
  • I am tradesman and with a little help from my friends, I can build my house for a lot less than theusual construction cost, why has the Valuer adopted a standard construction rate per square metre as the Cost to Complete?

    The Cost to Complete advises the lender how much they would have to pay another contractor to finish the project in the event that the client tradesman abandoned the job. A full fee would be payable because the lender has ‘no friends’. The importance of the correct Cost to Complete figure is recognition that a partly completed project will always sell for less than it’s true value. If the lender wishes to recover their loan monies they may need to complete the project to release the full market value.
  • I need a Completion Certificate from the Valuer, so my bank will release the remainder of my loan monies. I still need to have the driveway and fences completed. Will the certificate be issued?

    The simple answer is NO. The Completion Certificate is only issued when all contractual matters have been completed in a satisfactory manner. The Valuer can issue an interim progress report less the two items yet to be completed. In this case these are the driveway and fences.