Accurate valuations make for stronger investments

With nearly 25 years’ experience, Southern Cross Partners runs a specialist lending division that identifies high quality, short term lending opportunities, across residential housing and construction projects.

A central part of identifying high quality lending opportunities comes down to a property’s valuation.

When a loan application passes internal approval processes, Southern Cross Partners lends its own money to the property owner before placing the loan on our online portal for investors. So, we are just as focused on the valuation as investors are.

With the heat of New Zealand’s housing market, property valuations can significantly increase year-to-year. So, how we determine a valuation is integral to our lending process.

Valuations dictate what a property is worth and therefore how much we’re willing to lend. We’re conservative lenders. Whenever we’re faced with two different valuation methods, we always use the method that gives us the lowest value.

We generally rely on registered valuation (RV) or comparative market analysis (CMA) when valuing properties. But there are other inputs for valuation too.

• Registered value (RV)
  • An RV places a value on a property based on size of the land, condition of the property, and the state of the local market. These valuations are conducted by a certified registered valuer. It’s specific to the property we’re lending on and in almost all cases the valuer needs to visit the property in person to complete their work. 

• Comparative market analysis (CMA)
  • A CMA estimates the value of a property by looking at similar recently sold properties in the same area. These valuations analyse and compare information about property such as location, total square metreage, number of bedrooms and bathrooms, the year the property was built and any completed renovations. We use leading property data, information, analytics and services provider, CoreLogic, to determine our CMAs. 

• Sale and purchase agreement
  • A sale and purchase agreement is a legally binding contract between a vendor and a buyer when selling a property. This outlines exactly what the purchaser is paying for a property. 

• Real estate appraisal
  • A real estate appraisal draws from similar information as a registered valuation, but they are conducted by real estate agents.

In our investor portal we always provide information about the valuation amount and the valuation method. But if you ever have any questions about specific lending opportunities you can speak with our team.