How To Find Out How Much My House Is Worth?

The worth of your home can be discovered by hiring the services of a Property Valuator. A property valuator will measure your property and other pertinent factors in order to provide you an accurate estimate of your house’s current market value. There are also online House Price Calculators that you can use to discover your property’s worth.

What is a Property Valuator?

A property valuator is an individual who possesses the expert skill and knowledge to assess the value of a property. Said property can be a residential one, or an industrial or commercial property. An expert valuator is able to accurately measure the value of a property by using one of five methods, depending on the type of property. Also, a valuator must have deep knowledge of the estate market in the region where he/she is practicing.

After completing a valuation, a valuator will deliver to whoever commissioned the valuation exercise a summary of the discoveries concerning the property. Said discoveries will be submitted in a formal document known as a Valuation Report.

What methods does a Property Valuator use?

In order to determine the true market worth of a house, a valuator can use any of the following five methods. Keep in mind that the method used is dependent on if the property being evaluated is a residential or commercial one.

• Comparative Method: This is the method often preferred by valuators when evaluating a residential property. Also known as the Comparable method, a property is valuated using this method by estimating the worth of a property based on the worth of neighbouring properties. Property information such as; location, size, availability of facilities, condition of the property, etc. are all equally used to determine the property’s worth.
• Profit method: This method is the preferable option when trying to valuate a commercial or business property. The figures used to calculate the property’s worth will be derived from the business’ record of loss and profit, or income statement.
• Cost method: This method analyses the cost of each component of a property. It accomplishes this by calculating the free market value of a property’s land before adding it to costs of reconstructing the property. The depreciation the building has undergone since its inception will be subtracted from the previous resulting figure.
• Residual Method: This method is the preferred option when evaluating a property that is undergoing development. Property developers mostly use it when trying to determine ROI of developing a property.
• Investment Method: A commercial property that is capable of yielding future cash flows is better suited for this method of property valuation.

From the above, it is clear that the best method for calculating the value of a house will be the Comparative or Comparable Method of property valuation.

What is an online Property Valuation?

An estimate of the current market value of your house can be got with the help of an online property valuation tool. It is an easy to use process that provides quick results. For it to work, the average tool simply asks for data concerning the postcode of your house’s location, your house’s address, and building details to be entered alongside other relevant property information.

Online property valuation tools are useful for accessing easy and quick estimates of a property’s market value. By providing answers concerning the current condition of your house, the online valuator will be able to let a property owner know how much he/she stands to make upon sale of their home. The online calculator uses a number of factors to determine a property’s estimated worth. Some of these factors include; number of bedrooms located in a house, if the house comes with a garden, how much parking space is available, if the house has undergone any conversions or extensions, and the age of the property (is the house modern or old-fashioned).

But keep in mind that while this tool has its uses, it also has it shortcomings. It should only be used to get an idea of the estimated worth of a property but should never be solely depended on. This is because different online valuation tools can deliver different values. Another shortcoming of the online tool is it is not as thorough as a physical expert valuator and it’s incapable of taking into consideration all the necessary variables that a professional valuator will not ignore.

What can I do with the knowledge of my house’s worth?

Knowing the true worth of your house can be useful in any of the following instances;

• Negotiating price of a property you are looking to sell or buy.
• When attempting to secure a loan
• When attempting to refinance a property
• Calculating taxes.
• Calculating the mortgage on your property.
• Calculating amount for a divorce or estate settlement.
• Determining insurance coverage.

What happens if I’m wrongly informed about worth of my house?

Having the wrong information concerning the worth of a property can lead to any of the following undesirable consequences;

• Overvaluing a property: Having an overvalued estimate of a property’s worth is a probable consequence. It occurs when the value of the property is thought to be higher than it actually is. This can occur due to a flawed valuation process. While most property owners will initially be happy to hear that a high value has been attached to their house, this can lead to a problem when time comes to actually sell the property by causing delays. Said delays will arise when a property is advertised for sale but no one shows interest upon hearing a bloated price that far exceeds the market range for such a property.
• Under-pricing a property: This occurs when the property in question has been estimated at a value that is far below its actual market worth. An ineffectual property valuation can cause this and lead to a property owner selling his/her house at a price that is far below what he/she should actually get. This can lead to an irrecoverable financial loss.

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