If you are serious in making profit from your properties, one of the important step that you should do is understanding the property valuation process. In order to get a good value on your property for sale or other purposes, a valuation visit will helps you a lot.
The property valuation process is going to be something that will estimates the property’s value. It might not the exact value but it will be used as the final value that will be offered to the buyer. Remember that in order to get a good sale, you should get a good deal.
In fact, to achieve a realistic figure for a property’s value, the process needs to include cross reference of similar properties in the local area and as the property market involves the changing price per month, the accurate figure is more harder to be acquired. However the importance of property valuation process is always there.
So let’s see the things involved in property valuation process.
1. Identify property under valuation (identify tenure/size/physical characteristic/market etc)
The first step is the identification of property where the person or valuer will look into the property in order to determine its value.
2. Identify factors influencing the value (federal/state/local and social)
The property value will be determined by a number of factors. These factors include size, location, condition, date of transaction and details on anything else that has been handled on the property over time. But keep in mind that the most important factor is location, location and location.
The other consideration is the current market price and how well the particular property with similar features is being sold in general around the country.
3. Data collection & analysis
Before proceed with the valuations, valuers will inspect and analyze a large number of sales in the local context to gain better understanding of the property and the current market. These information are then used to value the representative property.
A valuation will also include looking at the overall condition of the property taking into account specific issues such as maintenance. After that the process involves looking at similar properties in the local area and determine what price is appropriate and acceptable for them.
4. Quantification of values (calculation and valuation techniques)
The most direct technique during quantification land value is to compare the property which is being valued with the land sold within the local area with have similar or alike features. This method is called comparison method.
When comparing the property being valued with the compared properties, the valuer may take a number of factors into consideration. This consideration includes:
- The location
- Date of transaction
- The view (Excellent/Normal/Lack)
- Land size and shape
- Nearby development and amenities
5. Opinion of value (estimation)
When all of these processes have been considered the price of the property can be estimated and the owner can proceed to the next deal. Keep in mind that it is important to be realistic. Not only the valuers but the owners also need to have a better understanding of how property prices are valued and estimated.
In fact property valuation process is the hardest part of real estate agent jobs. This is because property valuation process requires good knowledge of local property prices and market conditions. But this is not the reason why you can’t understand the property valuation process because if you have basic knowledge in this, it would be better for you in dealing with your properties.