Are Apartment Valuations Accurate?
Apartment Specialists Podcast No: 140
What do you need to know in order to get the right apartment valuations? What questions do you need to ask the valuer? Watch this video to get some insights on apartment valuation.
Good day. Andrew Murray here from Apartment Specialists talking about apartment valuations. Now what I am talking about here is registered valuations. This is when you get a valuer to do a valuation and you pay them a sum of money, generally around about $500, to do a valuation on your apartment.
Now, they are generally wrong. They are generally too high, or too low. Being fair, I am not saying that the valuers are doing anything wrong. But it is what they have to go on to do the valuations.
You see, valuations are always looking backwards especially with apartments. This can be a huge, well, it is a huge problem.
For example, I will see a bank valuer, or a valuer go and do a valuation of an apartment. The sales statistics that he is looking at are two months old. That is because apartments that have sold today will not show up on the statistics for about two months.
Often they will be looking at a building (because there are over 300 to 400 buildings in Auckland CBD and the fringes) where the particular building has not had its movement. Another building that is almost identical just a few streets away, is selling for say $50,000 more. And the apartment complex which the valuer is doing the valuation in - the prices, well there has not been many sales, or the previous sales were under pressure or they were mortgaging options, or something like that.
The statistics they have got to work with do not show the situations under which the apartments are sold. For an agent, it is a very exact science. Because I am dealing with apartments that are exactly the same, if I have got apartments in a building and they all look the same, I know what they are worth.
Where a valuer, they have got to come in and value. I mean there is over 24,000, 25,000 apartments. How are they supposed to know? And then there are very few valuers that actually are very experienced with apartments on top of that. Most of them just do houses.
What I am saying here is just be aware with your valuations. They can come up too high, too low. And just as far as when you are dealing with a valuer, ask them to compare the sales prices in other buildings that are comparable.
An easy way of doing that is to ask an agent or a colleague - the valuer's colleague - or maybe ring up a property manager, on what apartment complexes are similar. Because size is not always similar because you have ones with different layout. Some buildings are going to be a different quality, that kind of thing.
I hope that helps. It is a bit of insight into valuations and how difficult it is for these valuers to actually know where to value these apartments, especially in a moving market because it is changing all the time.
Anyway, I hope that helps. Andrew Murray, Apartment Specialists. Cheers!