All You Need To Know About Property Valuation
It’s the human nature to take a step back and take a background check before investing or spending a big chunk of their savings. The same goes with property as well. If you are interested to but or invest into any property then it is important that you get a property evaluation done so that you can analyse the returns for the future.
There are many of the processes that are involved in property transaction such as tax assessment, insurance premiums, and many other points where property valuation plays the important role. There are some of the points that are considered for the valuation such as location, age of the property, sustainability, amenities, accessibility etc. But if you don’t know what is property evaluation then this post is just for you.
What is property valuation?
In simple terms, property valuation is nothing but a detailed report that provides details such as market value of the property, condition status and many other important terms.
As a lender if you want to buy or sell the property without any crucial information of the property as per market trends then it is really impossible.
Who does the property valuation?
Generally the qualified and professional surveyor conducts the valuation by visiting the site, they jot down everything and click pictures. After this they present a valuation report to the concerned person.
Some of the parameters that are evaluated for the process:
- Number of rooms
- Location
- Condition of the property
- Structural defects
- Measurement and site boundaries
- Landscaping
- Risk and benefits of the property.
Based on these points the report is prepared and presented to the concerned person.
Why property valuation is important?
There are plenty of the reasons why you should consider property valuation. Helps to provide a competitive and fair rate for your property so that the taxes can be calculated. The further process gets really smooth once you are done with the property valuation process.
Here are the top 5 reasons why property valuation is a must:
1- Buying and selling purpose
Property valuation is really recommended before buying or selling any estate. This process helps you to take an estimate of the fair market value of the property.
It’s the simple process which involves a professional visiting the site and take an estimation of it’s current worth in the overall market.
2- Renting a property
The process of estate valuation is really helpful to determine the fair market competitive rent of your property. While dealing with the tenant, you can easily tell them the accurate possible price.
3- To transfer a property
Even if you are interested to transfer your property to someone else then the property valuation will help you to get idea about the best possible cost. On the basis of property worth, the stamp duty will be decided.
4- For renovation
Many of the times, we want to decorate our house, change some settings and even build it from scratch, this is when we need to consult a qualified property valuer.
5- Ease in home loan application
There are many of the times, individual prefer to get a home loan. Lenders asks for the property valuation to get the idea of interest rate of loan. It also helps to set different mortgage terms and conditions.
Type of property valuation methods
Generally there are many types of property valuation methods but here we are going to cover important ones:
a- Income approach
The income approach property valuation method is used to evaluate a property based on the income it’s going to produce for the investor. This is the most used method by the investors as it helps them to assess and project their returns and future earning. Based on these factors they decide if they want to sell the property.
b- Market value
The Process in which we estimate the market value of the property as of the specific date. Before making any big decision about real estate transactions, business, government, people, investors and mortgage companies they all consult to the appraisal report.
c- Comparative market analysis
Before buying or selling any property the real estate agents or broker prepare a proper comparative market analysis report. This report helps sellers to list their home at competitive prices and buyers can make customised offers.
