Property evaluation is very important if you are looking for listing your property in near future. It is very crucial to find the value of your property. Even if you don't list it, you must have an insight into the valuation. This is so because it helps you to get a fair chance during appraisal and tax benefits. So, in this article, we will discuss the various concepts of property valuation and how you can calculate it.
Now, property valuation is most critical for the following aspects in your future endeavours:
The last one is the most common requirement for any realtor. So, it must be the same for you. but you must know that evaluating property is a mammoth task. Many parameters determine property valuation. So, even if two properties are evaluated in the same locality, you may see that the property valuation is different. So, what are the underlying factors in this calculation?
Well, for starters, you should know that properties are valued against their distinct features and furnishings. There are different features upon which the basic valuation is done. Some of them are listed below:
Location – it is the prime factor in determining the value of a property. If you are located in the urban metropolis, you can expect a higher valuation compared to that of suburbs. However, things are changing now a day. So, realtors are investing more in the suburbs. Thus, you can get a good valuation of your property in the suburbs.
Lot size – it also plays an important role in the calculation. You may get good value if you have a large plot size. Simply put, if the area coverage is huge, the value will be high provided the same square footage rate.
Amenities – The locality also plays a vital pivot in the calculation. If your locality has basic amenities, the calculation will be different. But the calculation will be different for luxury amenities.
Floor plan – better floor planning gets better valuation. The way your living room is connected to your bedroom, the hallways, kitchen space, all play a significant part in the evaluation.
Supply and demand – real estate valuation largely depend on these involuntary functions. You have no role to play in that but the market does. So, if the demand is on the higher side, you can expect the valuation to be more.
To understand the supply-demand better, let us have a better look at it in the next section.
Concept of supply-demand in market property valuation
The basic definition of property valuation is the net present worth of a property taking into account the future benefits. Now, the estimate of a property valuation considers social and economic trends. Therefore, they have a major influence on the value proposition of the property.
Utility and scarcity have a major influence in determining the valuation of a property. On one hand, the utility is the ability to satisfy a desire or need whereas scarcity refers to the finite supply of the properties.
Now, you must know what value is. Value is not necessarily the price or cost of the property. Instead, it is the unsolicited amount that is non-transferable. So, if the sales price of a house is $150,000, the value may be higher or lower. And then, comes the market value. It is the most important factor to determine the value of a property.
Market value relates to the appraisal provided as per the location, utility factor, demand-supply, and unique features of your property. So, now that you have understood the basic terminologies of property valuation, let us have a look at how you can calculate it for yourself.
How to calculate the value of your property?
There are many ways to calculate the property value. However, for ease of use, you can find an easy estimate calculator on the internet. They have an inbuilt algorithm and you just have to provide input for each of these functionalities. Based on the input provided, you will receive the estimate within a few minutes.
The most important aspect for you to know is the property type, built-up area, and floor plan. There are some additional inputs that you need to provide like parking facilities and other amenities. Based on that, you will receive the estimated value of your property. You can recheck the valuation by calling in a property expert to evaluate the property.
However, asking for a valuer to evaluate your property will be a much better option. This is so because a realtor or a valuer knows much better about the market condition and rates. They can give you better insight about the property. They can also suggest you about the improvements you may need to make. You can use this information for upselling while listing or showing the property to prospects.