Blogs

Home / Blogs / Property Valuation and Home Appraisal

Property Valuation and Home Appraisal


Posted on: 10 October 2021

 

A property appraisal is a good way to determine what the local property market is doing at that point in time, and is a key step to know your true net worth. Has your local property market increased, have you recently renovated, are you interested in investing, are you looking to upgrade or downgrade? When you know the details about the value of your most important asset you can make better decisions which more positively affect your current and future financial wellbeing. Correspondingly, parties-in-interest often depend on real estate appraisals. The parties include the debtors, the creditors and their respective legal counsel This discussion will major on property valuation and appraisals.


An estimate of price for your property in the current market is known as property appraisal. Agents of the Real estate major on answering the ‘how much is my home or land worth’ question, and they do it by running a relative market analysis which involves getting similar properties that were sold within the last 3 months. The nearer they are able to match your property to others sold in the area, the more accurate the appraisal will be. Agents also examine contemporary competition, vast market trends, the property’s structure and its condition. Property appraisals are a nice way of getting to know of your properties potential market value at that particular time.


REASONS FOR PROPERTY EVALUATION

A property valuation service is usually required by a bank or financial institution before approving a home loan. It is also used by buyers and sellers who need an independent opinion prior to pre-purchase or pre-sale, family or partnership settlement, capital gains tax, and in some instances building insurance.


WHY DO I NEED A HOME APPRAISAL?

  1. It gives one an estimate value of your property
  2. It gives one the price its home is likely to gather in the current housing market.
  3. It gives one an idea of what to expect when one begins the process of selling his house
  4. It might help one in making the decision of whether to sell or not.
  5. It helps one to know of how long it will take for him or her to sell his property.


WHY DO I NEED TO HAVE THREE PROPEERTY APPRAISAL FROM DIFFERENT AGENTS?

  1. Can be used as a guide to pricing or an estimate.
  2. Can be used to obtain a definitive value.
  3. Can be used for the purposes of settlement,
  4. Establishing the value of a deceased estate.
  5. In order to be able to settle on the best alternative.


WHAT DO ONE INCLUDE IN THE PROPERTY ESTIMATES?


1. PROPERTY SIZE


When conducting a property appraisal, the real estate agent will look at the size of the entire building, the size of the structure on the land, as well as the size of the relevant areas within the home. For instance, how big is the living area or main bedroom? The agent, however, has to measure up these measurements against other properties in the area. It’s also important to understand the potential buyers or target market.



2. NUMBER OF BEDROOMS

Bedrooms are a key element of the property appraisal process. Normally more bedrooms mean a higher market value. However, when conducting an appraisal, the real estate agent will take into account the size of the bedrooms, whether they have an ensuite, built-in wardrobes, views, etc.



3. LOCATION

When looking at the location, an agent will not only look at the street the property is in and the vicinity to local attractions, but they’ll also look at what school catchment the property is in, what amenities are nearby and what public transport routes are accessible. But remember, just because your property isn’t necessarily near anything, doesn’t mean it’s not going to attract a good price. Sometimes, the quieter streets and areas are just as desirable.



4. FIXTURES AND FITTINGS

When it comes to fixtures and fittings, they’re not always sold with the property. Curtains, for example, do not necessarily need to be included. Neither do light fittings. When analyzing the fixtures and fittings, the agent will firstly take into account whether they will be included in the sale price, and then if so, what condition they are in. While it may seem minor, a potential buyer walking into your property and looking at everything they have to fix may push the price down.



5. AREAS FOR IMPROVEMENT

When analyzing a property for appraisal, the real estate agent will look at all the areas that need to be improved, or even just could be updated. In fact, they are often a great person to ask where you should spend money on home improvements. They know what local buyers are looking for and what they value in a property. It may be as easier as a quick paint or replacing the door handles. Other jobs may be a reinnovating of the kitchen or bathroom. You need to weigh up the cost of the fix against the possibility of a higher sale price.

NEED FOR HOME APPRAISAL

  1. In order to get a better sense of the market value of the home. In doing so one can determine a realistic asking price, increasing the likelihood of a fast sale.
  2. It can help you secure a loan for instance when you are refinancing your home lenders will require an appraisal to ensure that the new mortgage can be justified by what the house is worth today.
  3. When appealing for tax assessments since property taxes are calculated based on the fair market value of your home.
  4. In case one is applying for other loans for instance the types of loans, including cash and business loans, which may require you to use your home as a source of collateral.

CONCLUSION
A property appraisal and valuation are a great way to find out what the local property market is doing at that point in time, and is an important step to understand your true net worth. It’s important to understand what your property is worth.