Property valuation takes into consideration several factors like general property location, economic trends, and conditions of the general demographics, public property market, renovations, and the property itself.
If you have intentions of selling your house in the future, you are going to need to find out how much your place is actually worth. Well, property valuation, also considered as real estate evaluation, is the method of evaluating the house worth if it were to be placed on the market for sale.
Estimating the value of your property is the first step towards bringing prospective customers to take an interest in what you have to offer.
Here is more information about what exactly property valuation requires, and the factors affecting the process.
About Property Valuation
Market value is the estimated amount that property is likely to fetch on the day both parties’ buyer and seller agree on an agreement.
It is the amount that has been accepted upon by all parties involved in the transaction. It is quite different from the asking price, which is the price that the seller of the property quotes to possible clients while negotiating the exchange process.
The genuine valuation process is an estimation of how much capital the property is likely to be worth. However, valuation is carried out by approved firms and their representatives (normally banks and their associated experts) after having taken into consideration property transaction costs, as well as other market factors.
Advantages of having your Property Evaluated
There are various instances when you would need to know your current property valuation. For instance, you might be planning to carry out significant renovations soon, before selling your house.
In this case, you must find out the value of your house after having changed it, or after having lived in it for a significant amount of time.
This is to make sure that you know exactly how much your house is worth so that you can increase your profits if you wish to sell your house and sell it fast.
Factors that Affect Property Value:
1. General economic Trends
People are more inclined to purchase houses in cases of economic growth, where employment, salary levels, and labor markets are all on the rise.
During these events, people will also be more prepared to spend more on properties, which will likely push up the prices. As an outcome, it would not be unreasonable to ask for a higher price, particularly if you have received a high valuation.
2. Location of Property
Is your property placed in a neighborhood that is very coveted by prospective homeowners for the facilities, or is a stone’s throw away from main central landmarks, buildings, and offices of public interest?
Or possibly it is very well connected, with a variety of trains and buses which serve the area? These are some circumstances that can make a property very valuable and attractive in the eyes of many interested customers.
3. Conditions of the Property Market
Another thing to take into consideration is demand and supply models in the property market. You must check and see if houses in your precise area are preferred by customers, as opposed to other neighborhoods.
But, if nearly all house in the area where your property is situated goes on the market at the same time, you will have a tougher time trying to persuade potential homeowners why yours is the better one.
4. General Demographics
Is your property located in a community where most are ex-pats? Then they might be interested in smaller, more compact high-rises where they can be part of a bigger community and with various tiers of security.
If it is located in a neighborhood with young professionals and growing families, then prospective clients might prefer bigger homes to accommodate more people.
5. The property itself
Generally, a bigger property will command a higher valuation than a smaller one in the same community. If the property has facilities like swimming pools, round-the-clock security, gyms, and parking spaces, customers will be ready to part with a more significant sum to secure these extra perks.
Additionally, whether it is a leasehold or freehold property will also influence people’s buying decisions. While the owner of a freehold title holds the property indefinitely, the owner of a leasehold title ceases to keep it after the tenure has expired. As a result, more people typically favor purchasing freehold houses.
6. Recent Renovations
If you have lately made renovations to the place, especially major ones such as upgrading materials in one portion of the house to create more private spaces, the valuation of the property will get affected.
Even touch-ups to improve and uplift the quality of the property for new owners will contribute to a higher valuation for the property.