Brent Bastin: What you need to know about a property's RV

Brent Bastin

In some cases revising the RV up can negatively affect the marketing process.

Purchasers always want to know a house's Rating Valuation (RV), but sellers should think twice before lodging a revision with council in order to increase their value.

In fact, an RV that is lower than true market value can actually help your home breed competition and potentially fetch top dollar.

Rateable valuations are typically an assessment every three years to help councils set their rates. They are of use only for this reason — and have no bearing on a property's true market value.

The factors that determine an RV are not the same as those that come into play in a competitive marketing campaign. Personally, I would prefer a lower RV in order to not scare away potential buyers that think that the home — in some cases — is worth more than the vendor is happy to accept.

In some cases revising the RV up can negatively affect the marketing process. That's because it sets up an expectation in buyers' minds and can put them off even before they open the front door — which means they never get the chance to fall in love with your home.

An updated RV can cap the price of a property because people see it as a market valuation — since a professional valuer has inspected it, analysed sales data, and come up with the new valuation — this becomes a psychological barrier to achieving a higher price.

Now, if you're not selling your home in a competitive environment, there may be a case for updating the RV. For instance, if you're selling By Negotiation as opposed to Tender, you may need to anchor people's expectations higher because they may make an offer quickly.

In this scenario, the RV will be more influential as an initial starting point.

Otherwise, it makes more sense to capitalise on competitive buying pressures instead of worrying over an irrelevant RV that buyers soon forget about as they obsess over not missing out on your home.

The strategies a real estate agent uses to sell your property can be worth tens of thousands of dollars more than revising your RV. Plus if your property doesn't sell you are left with an increase in rates if the RV is increased. It's is always better to let buyers set their own expectations around price — with influence from their agent and the competitiveness of the sale — and for RVs to be used for what they were intended: council rating purposes only.

— Brent Bastin is a successful real estate salesperson, mentor, international speaker and business owner at Tremains Real Estate Tauranga. Find Brent via Instagram (@brentbastinrealestate) or Facebook (brentbastinrealestate).