The accurate monetary value of your home or real estate property for that matter is hard to know for any individual seller. Most people make assumptions about price and the valuation of their property based on the neighbourhood information about price. There could be multiple reasons for knowing the value of your property – it could be because you would like to sell your house or you would be interested in knowing the extent of loan you could get from the bank if you keep your house as mortgage. Or, even if it is a joint property, what is the value you could expect as a share.
Property appraisal is required even when you buy a house because you would want to know if the price you are paying does not exceed the actual price that should be in reality. When you avail a loan to buy a property from the bank, the first thing it would do is to get a valuation for your property.
Certified appraisers of reputed property management companies are hired who can work out the calculations and get the correct real valuation for your property with Pakenham real estate agents. Real estate valuation is an extremely important factor not only to institutions who lend money, but also to insurance companies and investors per se. Appraisers or most commonly known as property valuers generally use the following methods for calculating the current valuation of property which is discussed at some length in this article.
This approach takes into consideration the cost of land and the cost of setting up the same property from scratch under current market prices for Brimbank Real Estate Agents. As an investor if the cost of setting up the same is more than the buy price, the investor would be attracted towards buying the property. This sort of an approach is generally used by valuers for new construction where data regarding sales of land is used while calculating the value of the property.
Sales Comparison Approach
This method of valuation generally goes with apartments, villas and bungalows. It is a comparative approach where the property valuation is based on comparing the value of other neighbouring properties of similar type. The current valuation takes into consideration a host of factors such as neighbourhood, construction quality, and physical features of the property alongside if the property has important documentation or not.
Income Capitalization Approach
Commercial real estate property valuation generally incorporates this kind of a valuation structure. Here the present value of the property is often based on the future potential value of the property after a certain period of time.