The value of a property is essentially the price buyers are willing to pay for a property. Property owners often attempt to obtain an estimated value for their property to clarify exactly what their property is worth on the market. Likewise, buyers would need a valuation report to ensure they’re not paying much more for a property that’s worth less than the asking price. In fact, a mortgage lender will offer a mortgage loan only after a valuation has been done by an approved appraiser or surveyor.
Location is one of the most crucial determinants of the value of a property. Properties located in areas with a high level of appeal will have a better market value than those located in areas with low appeal or desirability. Highly desirable areas are often those with various impressive amenities or other sentimental value attached to the area for any number of reasons.
One of the biggest turn-offs for property buyers or renters is a high crime rate, so a property located in such an area should be expected to be valued less than property in safer areas. The same applies to properties in flood prone areas; because of the possibility of natural disaster, properties in such areas will be less desirable.
Other location-related factors that may reduce the value of a property include the name of the street where the property is located, and if the property is associated with anything sinister such as a death.
Properties located in areas with top performing schools nearby are expected to be valued higher than those around less impressive schools. The same applies to properties located near high-end shops and restaurants. Also, properties located in areas with a neighbourhood association may be valued higher because the neighbourhood will likely be maintained properly.
Another factor that would increase the value of a property is the availability of good transport links as buyers are often attracted to properties with good access to rail stations and motorway networks. Also, properties that are located close to large supermarkets will be better valued because such areas are highly desirable. The same applies to properties in close proximity to farm shops and organic food markets.
You may find that properties located in areas that have developmental projects commissioned may begin to rise in value, even when the amenities are not in place already.
Yes. In fact, the value of a property largely depends on the value of similar properties within the same area. It is by comparing the prices which similar nearby properties have sold for and how a particular property measures up to the others that an appraiser will arrive at an estimate. Because the value of property never remains constant, the appraiser will only use recent data to make comparisons. Also, if the properties closest to the property being appraised are nicer and are better maintained, this could result in a lower estimated value for said property.
The appraiser will assess a property considering what a buyer will want to pay less or more for, and if the property has upgrades others don’t, this would raise its value. Likewise, a property‘s value will reduce for every upgrade it doesn’t have that other similar properties have. Features that are going to be taken into account during an appraisal include:
Before making costly modifications to a property, it is important that the owner makes accurate calculations to determine how much of a difference certain improvements will make to the value of the property. This is to ensure funds are not wasted on a modification that will take more out of your pocket than it adds to the value of the property. Improvements that can be made to a property to increase its value include:
When the date for valuation draws near, it is essential that you finish up any renovations or modifications being made to the property, as improvements only count when they are ready. An appraiser will judge a property based on how it was when they arrived. While it may not make too much of a difference to the value of your house, it helps to clean the house and get rid of clutter, as well as fix minor issues such as peeling paint and outdated light fixtures.
Sometimes, the benefits of improving a property may be overestimated and a property owner may make the mistake of over-improving the property. Again, location comes into play here considering that it is unlikely a buyer will pay a high price for a property in an area where other houses cost significantly less than the asking price. Also, ensure any modifications you want to add to the house are legal.
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