How is the value of your apartment calculated? Oftentimes real estate agents will look at the sales statistics for the apartments in your building and base the current value of your apartment off these previous numbers. But how can sales in your building alone be an accurate gauge on price?
The value of your apartment is usually calculated by a number of factors including recent sale prices, sales in the buildings and the buildings in similar areas.
Firstly, we look at apartments that are the same, these are usually in the same building. Most agents stop there; we go further and look at other buildings that are similar to help us gauge the real market value of your property.
This is where our expertise are superior, we have the knowledge of all the buildings in Auckland and understand our market well.
Calculating size, carparks, level and so on are all important factors to consider when valuing a property as well as record prices in the building and recent sales in both your building and other that are alike.
We can market your apartment without even entering the building as we have floor plans of all buildings in Auckland and know these buildings inside and out.
What is the difference being a specialist for you, an apartment owner looking to sell? With thousands of apartments in the Auckland CBD and surrounding suburbs and at least 100-150 apartments selling every month, you need the right information so you can make the best decisions for you.
Apartment specialists looks at the value of apartments, not just in your building, but of those in the surrounding buildings as well. The apartment market moves all the time and we make sure we’re aware of it when valuing your apartment.
There are over 26,500 apartments in the Auckland CBD and fringes and around 400 buildings which will become up to 450 in the coming years. Each month there are 100 to 150 sales of apartments.
We know this by understanding our market well. This is done by constantly keeping up to date and being in the know. It is not just about being an agent but about being a specialist in the market.
We look at apartments that are the same, these are usually in the same building and look at other buildings that are similar to help us gauge the real market value of your property. Calculating size, carparks, level and so on are all important factors to consider when valuing a property as well as record prices in the building and recent sales in both your building and other that are alike.
By being well informed, we can help you make the best decision that works for you and selling your property.
Auckland apartment valuation is done using different methods like actual comparison of purchase price or meterage. It all depends on the valuers. However, this podcast will help you look into your apartment and show you how you can increase its value.
Andrew Murray, Apartment Specialists. How is an apartment valued?
Now, an apartments’ size does matter more than houses. More than anything else. And the reason why is the value of an apartment is all brought down to the value per square metre. For example, if you purchase an apartment for $400,000 and it is 100 square metres, well then the value of the apartment per square metre is 4,000 – per square metre.
What a valuer does is they come in, they talk about the market. A lot of this is copy-and-paste stuff. But really it comes down to the sales they use. And the valuer decides what sales to use. So there is a big grey area here. There is a lot of discussion that can be around – on the equity, on valuations – because the valuer can choose high sales in the building or low sales to compare. And they find values to support the value for something sold for. But anyway, stop worrying about it.
So, how it is done is for example here, this is a property in a character building and so what I have used to compare similar buildings in sales in buildings and taking every single one down to a square meterage. Say 24 Anzac Avenue, it is a three bedroom brought down to $3,496 per square meter because it is 163 square meters and it was sold for $570,000. Okay, one in the Metropolis. Okay, $540,000, 85 square meters. Divide 540 by 85, it gives you $6,353. And so, it is all about the sales price divided by the square meterage and it gives you the value.
You can see here they also use one in the building which generally is most reliant because they are much more comparable. So, for example 1C $220,000 which has 43 square meters divide 220 by 43 and it gives you $5,116 square meters.
Anyway they look at all of that giving more weight in general to apartments being sold in the building and you have evaluation. A hundred square meters and $5,200 when it costs $520,000. Now, the actual purchase price of that apartment is very similar to that and that is what most valuers will do. They will come up with evaluation very similar to the purchase price because that is what the market has shown. And they use the sales through square meterage to show us. Now, what is a very interesting question is, different valuers can show completely different values and neither is wrong.
So, it is a very interesting process. But I hope that gives you a bit of an insight to how apartments are valued. And then it will help you look at your own apartment. Or help you when you look at the value of other apartments – that compare one sale for or another sale for. And at the same or similar kind of apartment – and take it down with a square meterage. I hope that helps.
Next week I am going to be talking about– the question I am always asked, “When should I sell my apartment? How do I know?” And back to apartment sales.
Staging is an important part of your marketing campaign. Having stagers come in to your property prior to photos will ensure your apartment looks at its best for the photos that go online.
We understand that often you are selling a property that may be tenanted and with it not being their own place the furnishings often don’t fit certain areas or the aesthetically it may need freshening up.
We offer this as a free service and come in and clean, tidy and present it to a high standard. For further information, contact Apartment Specialists and we will be happy to help.
Andrew Murray, Apartment Specialists. “How do I sell my apartment?” The question I get asked most often.
Now, it is all about having your apartment looking its absolute best online. So that is about using professional photography. And what I’m taking about today is not about you just paying for professional photography – it is having your Auckland apartment looking in its best light before the photographer gets there because otherwise it is a waste of time.
So, looking at the list of things that I’ve just come up in the last two days – rather than comparing my own and all that kind of thing – I wanted to look at two apartments that are very similar and can actually be really compared. So again here, you’ve got one in Harvard and one in Zest. They are investor apartments. They are the ones that a lot of people have difficulty with with tenants.
And now that is not an excuse. You can create a relationship with a tenant. And you will see that, as in regards to the results of professional photography. So both have used professional photography here.
Freehold, two bedrooms, the apartment in Harvard. Eleven photos. Two bedrooms, one bathroom. Two bedrooms, one bathroom. Both exactly the same size. Very similar. Both listed at exactly the same time. So you’ve got here, Freehold, two bedroom apartment, and the photography- it’s professional photography. I mean, the appearance could look better but it doesn’t look bad. It’s showing the apartment in good light. And how many views has it got? 396.
Now, we then look at Zest which is very similar. Professional photography as you can see by the wide angle lens. But the presentation is shocking to be honest. I mean, if you were an owner, would you want your apartment to look like that? If you are a buyer, what are you thinking? And this is an example where it just doesn’t create the same amount of enquiries.
So, it is about creating relationships with the tenants. It is coming in and lightly staging with them – and actually talking with them – and that’s a whole conversation in another process. But it is the result that counts. So professional photography is a must. But you are wasting your money if you are taking professional photography of something that does not look good.
So, I guess that is the point that I want to get through today. And you had probably see in the views 286. So from 286 to – how many were there before? Very quickly, my apologies. So, probably about 30% more views. So that’s 30% more buyers looking at your apartment.
Thank you for that, I will be now commenting on the third part of this question, Is it a feature or not a feature?
In this podcast, I’ll be discussing the reasons why most apartment owners lose thousands of dollars when they sell their apartment. Find out how you can avoid this situation and get the value you deserve. Learn all the essential strategies for any Auckland apartment sales.
TRANSCRIPTION: Andrew Murray, Apartment Specialists, Number Ten from the reasons why apartment owners lose thousands of dollars when selling their Auckland apartment. Is it the agent or the agency (Who Gets the Highest Price for Your Auckland Apartment)? Now, as an agent myself, I clearly know the answer to this one. I wanted to find out what apartment owners think. So I rang about 20 owners and talked to them about their apartments – all that kinds of things – and their plans for the future. And to each one, I asked them one question: In dealing with or when selling your apartment, what’s the most important? Is it the agent or is it the agency? And every single one said the agent. Which is interesting because there’s so much branding, so much advertising out there, for what? An agency. Yet every owner I spoke to said, it’s the agent that is most important.
And there’s quite a few reasons for that. Because, if you know the statistics, the same agents more often get the highest prices. Yes, an agent can be lucky here and there, but it seems to repeat itself. Also, if you look at the average wage of a real-estate agent being under $35-40,000 a year – realistically – I’d say it’s more like 50 or 60, but those are official statistics – that means probably about 5 to 10% of all the agents are selling all the properties. It actually says again that’s why – or it says it quite simply that the agent is more important than the agency when looking to get the the most value for your apartment.
So, that’s really important. So how do you find out if an agent is the best to represent you, or which one it is? It’s not “are they the top agent” because the top agent in this industry is judged by how much commission they’re bring in, not by the prices they get. In the housing market it’s very difficult to tell, because houses aren’t comparable. You can have houses in the same street, but how are you supposed to know the values, because they’re different. This one’s got a porch, this one doesn’t. This one’s got a pool, etc, etc. But in an apartment complex – you’ve got so many different apartments in CBD, over 18,000 apartments – they’re very comparable. So you can quite easily tell who is getting the highest prices.
So when you’re dealing with your Auckland Apartment agent, you want to ask them, can I see your last sales and how they make in the building that you sold them in? And that will give you a very clear indication of how good that agent is. And how focused they are in getting the best result for the vendor or commission in their pocket.
That is probably the final one, but the biggest and the simplest and the most unnoticed in this type of industry. I’ll say it again, the best agents are judged in this market by how much commission they bring in, not by the prices they get. So you as an owner really need to be aware of that when choosing your agent, and ask for evidence showing that it’s the values they achieve, and that’s the most important to you. I hope that helps and I hope these ten mistakes have been really, really helpful. I know we got a lot of good feedback for them, and a lot of people are listening, so thanks a lot. Cheers!