Why your Rating Valuation (RV) probably isn't what your home is worth
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Why your Rating Valuation (RV) probably isn't what your home is worth
If you have been thinking about selling, there is a good chance you have looked up your Rating Valuation at some point. Maybe it confirmed what you were hoping. Maybe it surprised you. Either way, it's hard not to let the number stick in your head.
That's completely understandable. But before that figure becomes the anchor for your expectations, it's worth understanding exactly what a Rating Valuation is, how it's calculated, and why experienced real estate professionals treat it with a healthy dose of scepticism.
What is a Rating Valuation, exactly?
Rating Valuations (also called RVs, CVs or Capital Values depending on where you live) are produced by local councils to calculate how much rates each property owner should pay. They are not designed to tell you what your home would sell for on the open market.
They are generated by a mass-appraisal process using algorithms that pull together broad data about land, location and property type. No one visits your home. No one walks through your front door, notices the light in the kitchen in the afternoon, registers how much work has gone into the garden, or factors in the new bathroom you finished last year.
The algorithm doesn't know any of that. And it doesn't need to, because that isn't what it was built for.
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They are only updated every few years
In most parts of New Zealand, councils update Rating Valuations on a cycle of roughly three years. That means the number sitting against your property right now could be reflecting a market that looked very different to the one buyers are actually operating in today.