A property valuation can be described as the process of having the value of a property assessed by a professional. It is accomplished by developing an expert opinion and providing an accurate estimate of the current market value of a real estate property.
An expert valuation is usually procured in order to ensure the proper amount is paid for either the buying or selling of a property. The estimated worth that is delivered at the end of a valuation is usually calculated by taking into consideration property market forces, the property’s features, and the property’s location.
Property valuations are usually carried out at the behest of either the property owner, or a lending institution that is about to become or already is financially involved in the property. The valuation will be submitted in the form of a formal report that will contain information concerning the property’s size (both building and land), building details, rates, the current condition of the property, and the value of neighbouring properties.
While a property’s valuation is most especially useful when trying to determine the price at which to sell or buy a property, it is also useful in securing loans, calculating taxes, determining the value of mortgages, estate settlements, insurance coverage, divorce settlements, ROI on property renovation and so on.
The worth of a property is usually determined by multiple factors. These factors are what a valuator will take into consideration when calculating a property’s market value. Below is a list of some of said factors:
A property’s location will play a key part in determining its value. This is usually accomplished by using the value of neighbouring properties to determine the worth of the property in question. Also, a choice piece of real estate located in a bad neighbourhood, such as one with a high crime rate or prone to flooding, will have its worth negatively affected by its location. This is why it’s important that prospective property owners don’t consider just the current potential of a property but also the future potential of its location.
The number of rooms in a building will contribute to the valuation of that property. But it is not just the quantity of the rooms that will be considered but also the quality, that is, the sizes of the rooms. Also, availability and quality of rooms such as kitchens, laundry rooms, bathrooms, and so on will also be taken into consideration.
How old a building is will also be focused on when evaluating a property’s worth. This is because older buildings are usually in less of a good condition. Also, older buildings usually lack modern facilities and the cost of installing better ones usually affects the property’s valuation. Although, if an older property has historical significance, this can positively affect its valuation.
This will be considered because a property that has more space, especially ground space outside, implies that there’s room for expansion. This can favourably influence a property’s worth. But if said outside grounds are poorly maintained as at the time of the valuation, it can have a negative rather than a positive effect on the property’s market worth.
A building that has been properly maintained and has less obvious wears and tears, such as cracked paint or walls, broken windows, leaking roof, and such, will be more favourably valuated.
A property that has experienced structural upgrades that actually improve the quality of the building will definitely have a higher perceived worth. Such useful structural improvements include; installing a garage, a portico, a porch and similar additions.
A building with modern as well as centralised heating will be perceived as having a higher worth. Also, buildings with neat, functional, and modern electrical wiring will be better appreciated by a prospective buyer.
The more storage space a property has, be it a shed, an attic, basement or otherwise, the more worth will likely be assigned to it by a valuator.
The value of a property can definitely be improved, but there is a limit to the extent to which it can be done. For example, if a property’s value is negatively affected by its location/neighbourhood, very little can be done to amend that. But there are other aspects of a property that can be amended to improve its worth.
All in all, giving a property a general tidy up and a facelift goes a long way in improving its worth and market value. A property that is neat, tidy, well maintained, and with working electric and plumbing fixtures is likely to get a favourable valuation.