Why You Need To Do a Property Valuation of Your Properties

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Why do a Property valuation

Introduction 

Property valuation is at the core of the property selling process. It is important for everyone involved in the buying and selling of property to know how much the property being sold is worth from the very start. This is to help you negotiate a fair asking price and for the buyer to grasp the current state of the local market.

What is Property Valuation?

Property Valuation or appraisal is the process of determining the worth of a property whether land, buildings or other properties.

A person may need property valuation if they want to sell or purchase a property or rent or let out a property. Property Valuation is also important to secure a loan or for taxation purposes.

Estimating the worth of a property requires the experience and expertise of a valuer. A valuer is a professional whose job is to determine and say how much a property is worth.

 

Processes Involved In Property Valuation

We will look at an instance where an investor is seeking to sell his house.

Looking for a professional Valuer

Before the asking price is fixed, the owner would look for a professional valuer to determine the market value of his house and present the documents of the property to him.

Inspection of Property

The valuer will visit the house and conduct an external and internal inspection, taking pictures and even asking the owner questions about the property. The valuer will evaluate the land component of the property, which can make up a significant proportion of the property’s total value.

The valuer will also assess the size, shape, aspect, and topography of the land as well as the zoning and development potential. Inside the property, the valuer will measure the size of the building and take note of the number and type of rooms, the property’s age and condition, its fixtures and fittings, its design and layout, and any unique characteristics that could affect the value.

Interestingly, valuers look at many of the same things that a prospective home buyer would look for when assessing a potential purchase. The reason is that overall home buyers make up the majority of the market for real estate and therefore play a major role in determining “market value”.

Determine the value of the property

The Valuer would also compare the property with other properties in the neighborhood that has been sold currently. He would then use his expertise to determine the value of the house.

 

Factors that are Consider In Property Valuations

  1. Location of the building: First, the value of your building is based on where it is located. Different neighborhoods affects the value of a building. The neighborhood’s value is based on multiple factors including its crime rate, how close it is to schools, shopping centres, and access or transportation to and from the home. Also, comparable prices of homes up for sale or recently sold in the area is also considered. Values of houses in urban areas can go down based on vacant lots or condemned properties in the vicinity, and pricing in rural areas can decline depending on road access and land use nearby. The location of your building, therefore, goes a long to affect the value of your property.
  2. Structural Construction Materials and Updates: Construction materials used to build the foundation of your home is considered as important in appraising your home. A house built recently with modern materials, or updated to use modern materials will hold a higher value than a home that hasn’t been updated since it was originally built decades ago. Changing or updating other materials like the roof, windows will also add to your home appraisal value because they improve the overall efficiency and safety of the structure of the home.
  3. Age of the Home: How long your building has lasted will also be a factor in its appraisal value. This does not mean that a newer home, for instance, would always have a higher value than an older one. However, new homes that were built within the last 10 to 20 years are less likely to have major issues, so there’s lower risk in buying them. This will, therefore, increase the home appraisal value. Older homes that are located in historic districts or have been maintained very well for decades will also have a high appraisal. This means that new buildings that are poorly built and show signs of weakness would have a low value. An old building too that has not been properly taken care of would also have a low value.
  4. Number of Bedrooms: The number of bedrooms in your home has will also increase your home appraisal value. The home appraiser will compare your home to other homes in the area with the same