Property valuations: The untold truths about the home valuations
Seal the deal in the real estate property investment market is not that easy. It comes with lots of challenges and difficulties. Though one cannot deny the fact that – real estate property investment is the most profitable business. But before enjoying the profit shares earned through real estate property it is imperative to make the right funding decisions, grant accurate offers at right time, and calculative decision-making ability as a real estate investor.
But this is all not as easy if you are naive to this real estate property investment world. For this, all you need is the property valuation services. Hire a property valuer to evaluate the right market value of the property. Also, they guide the clients when to make the sales and how to increase the property value. But here are the secret facts that you should be aware of and nobody is going to reveal about the property valuation services.
Your property value completely depends on the comparables –
Comparables are the properties similar to the subject property, sold out in the past three months of the subject property valuation. Comparables are the most important and desired element of the commonly used method of property valuation i.e sales comparison method.
Though finding the comparables is the tough task. Even for residential property, one cannot find exact one but yes, by making some adjustments one can find the similar type of the property and consider it as a comparable. But for commercial buildings, it is next to impossible.
First, we will understand how comparables work and What valuer should look for – Price of comparable is used to estimate the price of the subject property. Say for subject property and comparables are in the same area and similar in the number of rooms and bathrooms available, and comparable is sold out in last month only then the price of comparable will be the price of the subject property. Thus the property value is evaluated.
But the challenges for property valuer increases when exact comparable is difficult to find.
Look for recently sold comps – Basically, the comps are the properties that should have sold out in the last six months, while evaluating the subject property value. Property valuer should look for most recently sold comparables. Because selling and buying of the real estate property depend upon the most fluctuating factor i.e local market condition and trends. Ideally, the market condition doesn’t change within the six months of the time period so it is advisable to look for comparable that is sold recently.
Comps should be near to subject property – The comparables should be near to the subject property. It is good to have comps within one mile. Nearer the comps higher the weight will be.
Compare the amenities associated with the comparable – Not only structural and area wise comparison will be made among the subject property and comparables but also keep the amenities into consideration while evaluating the property value. Look for the facilities comps and subject property have to offer.
These are the small points should be considered minutely by the property valuer while evaluating the property value. Being an owner it’s your responsibility to check the valuer is using the right comparables. So you will get the right value of the property.
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