Rates - GV

[Driftit 2078]

Does anyone have any knowledge around this?

My property was just given it's first valuation.  And it is a laughable amount.  Around half of what it should be even by their standards.

All the details are correct.  They just have no idea what land is going for at the moment.

It means my rates are low.  But will this bite me in the ass in any way when they realize their mistake?  Or should I just ignore it as it is up to them to determine how much I should be paying.

[qube 3570]

You should be able to request for a re-valuation. the difference in rates should be negligible and having the correct GV should benefit you more if you decide to sell.

[jon dee 500]

Market sets the property selling price... RV is just for the Council to set rates. Enjoy your lower rates while they last

Cheers...

[Sammo 2544]

I wouldn't be too concerned unless you are about to sell - as John says, the market sets the price anyway and CVs are out of date before they are even released.

[gjm 3258]

Market selling price and Council valuation are very, very different. The only time a real estate agent will shout about the RV is when the selling price could be lower.

This makes life very difficult for buyers. House is valued at (say) $200000, although everyone knows it'll sell for (say) $350000. With so many houses being sold at auction, by tender or negotiation (lazy real estate practice imo) the bank will only lend according to a valuation. That means, the council valuation. Or an independent valuation carried out by an authorised and accredited valuer, which will cost you $750-1000.

To get a market value, talk to a real estate agent. They'll ask if you're looking to sell.

[Driftit 2078]

Cheers. I guess I will leave it. No interest in selling at the moment as I am building.

Bank actually had me get a private valuation. Which is actually pretty realistic.

 

 

 

[jon dee 500]

On 3/15/2021 at 2:32 PM, Driftit said:

My property was just given it's first valuation.  And it is a laughable amount.  Around half of what it should be even by their standards.

It just occurred to me that if the land does not have a building on it (improvements) then the rate will be for the land only. When there is a building on the land you will be rated on the capital value (land plus improvements). Such things will get sorted in the next revaluation cycle when your property will be valued according to the sale of similar properties nearby.

I'd just look at it as being a thank you from the Council for adding  another property to their portfolio of grateful ratepayers  

Cheers...

Edited March 16, 2021 by jon dee
Used the wrong word... fixed :)

[E30 325i Rag-Top 2956]

On 3/15/2021 at 6:53 PM, gjm said:

To get a market value, talk to a real estate agent. They'll ask if you're looking to sell.

From my experience of supposed Real Estate agents in NZ when you ask them for a market value the first thing they ask you is “what’s the rv?”.

Maybe I only approached poor agents..

[Driftit 2078]

2 hours ago, jon dee said:

It just occurred to me that if the land does not have a building on it (improvements) then the rate will be for the land only. When there is a building on the land you will be rated on the capital value (land plus improvements). Such things will get sorted in the next revaluation cycle when your property will be valued according to the sale of similar properties nearby.

I'd just look at it as being a thank you from the Council for adding  another property to their portfolio of grateful ratepayers  

Cheers...

It is just for bare land.  However they valued it at around what I paid for it 1 and a bit years ago.  Everything around us has increased around 50% in that year.  It's ridiculous.
I am just going to plan that they will significantly increase it at some stage.

[qube 3570]

13 hours ago, E30 325i Rag-Top said:

From my experience of supposed Real Estate agents in NZ when you ask them for a market value the first thing they ask you is “what’s the rv?”.

Maybe I only approached poor agents..

A bit different now with the current market situation. 

If you are a prospective buyer, their typical answer to "what's your opinion on true market value?" is "the cv is $xxx so somewhere around there". When you press them further and ask for comparative sales they give you random figures for non-comparable houses that are greatly different in room #, sqm size, condition so it doesnt help anyway.

I reckon they are basically trying to lure you in with a falsely low representation of what its worth in the hopes that you will go to the auction (make a crowd) and make you fomo bid to reach a higher price or to scare other bidders with higher budgets to push further so they dont miss out.

Or they just literally have no idea because market value is just a wild guessing game now. There is no reason for them to indicate any $ amount figure because it could end up literally anywhere.

If you are a prospective seller, their typical answer is to overstate the possibility if you take it to auction. Probably to entice you to sign with them and they will just end up selling it for whatever price it reaches on the auction.

 

[Sammo 2544]

We bought 7 years ago - was so frustrating with no agent giving an expected price, range or otherwise...simply asking me what I thought... I don't f@ck!ng know mate - I've never bought a house before...

With a hot market, not sure why people don't just do a private sale and hire an auctioneer (valuer and photographer if you like) and save $25K.

We recently rented our place out and I'm doing it all myself - viewings, liaison, contracts  - piece of cake.

[lord_jagganath 421]

12 minutes ago, Sammo said:

We recently rented our place out and I'm doing it all myself - viewings, liaison, contracts  - piece of cake.

some owners want to have a layer of anonymity between them and the tenant. ( i know my landlord does, had to do a bit of internet sleuthing to find out what they do, as the property managers are very tight lipped) , and for good reason, the CV on the house is a million. which makes no sense for an area with poor safety.

Edited March 16, 2021 by lord_jagganath
language, curbing the diatribe

[qube 3570]

31 minutes ago, Sammo said:

We bought 7 years ago - was so frustrating with no agent giving an expected price, range or otherwise...simply asking me what I thought... I don't f@ck!ng know mate - I've never bought a house before...

With a hot market, not sure why people don't just do a private sale and hire an auctioneer (valuer and photographer if you like) and save $25K.

We recently rented our place out and I'm doing it all myself - viewings, liaison, contracts  - piece of cake.

25k isnt much to save the hassle when properties are selling for 1.25x or more than what its "worth"

[Driftit 2078]

50 minutes ago, lord_jagganath said:

some owners want to have a layer of anonymity between them and the tenant. ( i know my landlord does, had to do a bit of internet sleuthing to find out what they do, as the property managers are very tight lipped) , and for good reason, the CV on the house is a million. which makes no sense for an area with poor safety.

Flatbush?

[m325i 709]

Quote

With a hot market, not sure why people don't just do a private sale and hire an auctioneer (valuer and photographer if you like) and save $25K.

Because you will likely end up selling for tens of thousands less. More so in a hot market. Your backyard amateur auction will not attract the same buyer pool and willingness to pay as a big brand marketed property. Private sellers kid themselves they saved. You see it time and time again, no private sales are 'high' in hindsight. 

People ask about CVs as they do provide some relativity, especially in areas where the properties are similar.

Although they are meaningless, they can have an effect I reckon. If 3 identical houses all sold in your street, but your CV is lower for some reason, it will give people pause to pay more for yours, even if it is better. It will not effect a registered valuation, and it can be reviewed if you want. (Source: I made CVs)

 

[gjm 3258]

36 minutes ago, qube said:

25k isnt much to save the hassle when properties are selling for 1.25x or more than what its "worth"

We're looking at a couple of places locally.
One has been subdivided and has no current CV. Agents are in the "what do you think it's worth", "we're letting the market decide" basket, and it'll go to auction.

Another is offered by 'Deadline Sale'. Again, no indication of price. CV on that one is 2.5 years old, and $225k. I'd not be surprised if it sells for twice that.

Haven't noticed any agents reducing their fees in light of the uplift in market activity, and their apparent inability to price something!

[jon dee 500]

I recently sold a house for a family member. some years earlier, for the purposes of reducing the rates bill, I had appealed the rating valuation and had it reduced by nearly 25%. This meant that when I came to sell the house the GV was well below the average for similar properties in the same street. When I engaged a real estate company to market the property they were not concerned by the GV and priced the house to the market at their assessment of what it should sell for.

When an acceptable offer was received I had an independent valuation made and the offer was $2K more than the valuation. Pretty much proves to me that a genuine buyer will do their own due diligence and put in a realistic offer. People not prepared to do their homework and just reference the GV will likely end up with a lowball offer and miss out. In the end what you offer when buying anything comes down to how badly you want it

Cheers...

[E30 325i Rag-Top 2956]

1 hour ago, m325i said:

Because you will likely end up selling for tens of thousands less. More so in a hot market. Your backyard amateur auction will not attract the same buyer pool and willingness to pay as a big brand marketed property. Private sellers kid themselves they saved. You see it time and time again, no private sales are 'high' in hindsight. 

In the current market situation in most towns and cities across NZ you are probably right, certainly for the hotspots like AKL, Hamilton, TGA, Wellington, I would agree that is the case.

When we sold (was 10 years ago now) I was so disapointed by the calibre of Real Estate Agents, and what they were willing to do for their 3% fees, coming from the UK with <1% fees and agents that had to work for their money (Mum was in the property business for a number of years and the family bought and sold a bit) that we did it privately. Ended up getting more than any agent said the house was worth for a fraction of the outlay and the hassle to be honest.

Few simple steps: Found out what similar houses in the area were selling for, got the CV re-evaluated (+$20k), got a photographer friend to take some good shots, put it on TradeMe & board out front, a few open homes. A number of offers, a bit of negotiation, and done.

Would I do it again? Yes, in the right circumstances. Would I do it now? Not with the Akl market the way it is, but then I would sell now anyway.

Back the the original topic of the thread, I would leave the RV as low as possible whilst paying rates, and only look to get it increased just before you want to sell. Unless the bank want to know what they are lending against.

[gjm 3258]

7 minutes ago, E30 325i Rag-Top said:

Unless the bank want to know what they are lending against.

And that's the catch.

If an agent puts a price on a house and you negotiate a purchase around that price, the bank is happy.

If an agent tenders, deadline sales, or auctions, then there is less certainty around the 'value' of the house. (I say 'value' because there is little actual value in the housing market at present - just some prices which are a bit better than others.)

Under these circumstances, the bank will lend to a registered valuation. First stop is the council, where it is likely the figure on the books is very different to what the market might suggest. Bear in mind that it is not the market suggesting a price for purchase at this stage - it is you, the purchaser.

As such, most people will need to get a qualified and bank-registered valuation done before the bank will consider a loan. And in the event of an auction, this should be done before the auction so you can bid with confidence, knowing that the bank is behind you. (If you bid and win, you are expected to pay a deposit on the day, and if you fail to complete the transaction, the deposit is normally forfeit.) A local valuer told me of people who had 5 or 6 such valuations done before they won an auction - each valuation costs around $750+GST.

With careful research you can 'play' the auction system a little. You'll not get a better price, but you can avoid the pre-auction expense of valuation.
Pre-arrange your lending. Carefully check the value of the property you are considering, including having an informal conversation with your chosen valuer. Ensure your auction settlement terms are suitable (4-6 weeks is not unreasonable, but many auctions cite settlement in 10 working days - you can normally change this), and that you have spoken to your lawyer, and advised the registered valuer you would use.
Then if you win your auction, get on the phone to the valuer and get that sorted. Most valuers, pre-warned, can turn this around in no more than 3-5 days. Take that to the bank, with the auction and lawyer details, and you're in a very strong position. Your pre-approval and the valuation should ensure a smooth process.

Risky? Yes, there are risks involved, and you cannot get around things like inspections and so on. But you can hopefully avoid the significant costs of several valuations (should you be unlucky.)

[Driftit 2078]

I just got pre approval for the maximum amount before I started looking.

All of the traditional Banks such as ASB, ANZ, and even Kiwibank had no interest in helping me build.  Especially because I purchased the land first and didn't have some inflated turn key package from their mates at Jennian.
I went to my local Building Society who were very keen to finance me.  Not the lowest of the low rates.  But it was this or a straight No for what I wanted to do.

[m325i 709]

20 minutes ago, gjm said:

 having an informal conversation with your chosen valuer

You can't choose your valuer anymore. The bank will appoint them via a 'clearing house.'  For this exact reason.

[gjm 3258]

15 minutes ago, m325i said:

You can't choose your valuer anymore. The bank will appoint them via a 'clearing house.'  For this exact reason.

I should have clarified: We were given a list of valuers that would be acceptable to the bank, and invited to select one.

[Driftit 2078]

1 hour ago, gjm said:

I should have clarified: We were given a list of valuers that would be acceptable to the bank, and invited to select one.

I was just told to get an independent valuation. Google searched the nearest crystal ball reader.

This was WBS (Wairarapa Building Society)

[m325i 709]

18 hours ago, gjm said:

I should have clarified: We were given a list of valuers that would be acceptable to the bank, and invited to select one.

Interesting. Major Banks in Auckland don't allow this. The valuer is assigned to you. 

Regardless, it is good advice to tell the valuer if there is a specific number you need. There is always a 'value range'