Property valuation: everything you need to know
Property valuation is not a minor issue. Find out how to appraise your property.
If you are thinking of buying or selling a property, the property valuation is a fundamental instance for you to know what aspects are taken into account when establishing the value of a property.
The property valuation is a process that allows determining the real economic value of real estate based on its characteristics, such as:
- Size.
- Location.
- Number of rooms.
- Finished bathrooms.
- Age of the property.
- Quality of construction materials.Proximity to points of interest, such as schools and access roads.
- Characteristics of the surrounding area.
- Land value.
- Built area.
It is a fundamental process if you are going to buy a property, since the amount that can be awarded in a mortgage loan application depends on this value. It is also very important if you are the seller of the property, since it allows you to place a price according to the market according to the characteristics of your house or apartment.
How does the property valuation process work?
In cases where the purchase of a home is requested through a mortgage loan, in general, the banking institution deals with the valuation of the property and proceeds by sending a professional who determines the value of the property. Although it is not usually different from the market valuation, there can be differences.
This is because the real value of the transaction (which has discounts between 5% and 10%) is not taken into account. For this reason, we recommend that you analyze the report delivered by the bank and request a review, in case there are any doubts.
If you are the owner of the property, you can make the valuation on your own by comparing it with the market . Although it may seem complex, you only need to apply good judgment to reach a value similar to that of a professional property valuer, without incurring the expenses that this implies.
If you’re not sure you can determine the value of your property, you can also turn to a professional property valuer. In that case you decide this route, the most important thing is to review the report delivered by the property valuers, which must include detailed information on the points that are taken into account to determine the value of the house or apartment. This allows you to understand the report and consider whether you want verification or a second opinion.
To choose a property valuer, keep in mind that they must be authorized by the corresponding regulations. In Chile you can access a list of professional real estate valuers, endorsed by the Ministry of Housing.
Why can the property valuation vary?
The price of a property in the market varies due to different circumstances, such as the time of year, the competitive offer and the use that is going to be given to it (either residential or commercial). You also have to consider if the property needs improvements or if repairs have been made in recent years.
Another important aspect to take into account is the location of the property, since the price varies according to the type of area in which it is located and the value of other properties in the same area.
Recommendations to calculate the value of a property
One way to calculate the value of a property is to take a tour of the area and check the sale values of other properties by calling directly to the telephone numbers that you find published. To do your own research, you must consider fundamental data such as the sale price, the age, the square meters of construction, whether or not it has a deed and what are the general conditions, that is, if it needs repairs and what type.
Based on the information collected, you can establish an average m2 value of similar homes and compare your property, contemplating whether in your case it is a newer property but one that requires more maintenance, so the value of m2 could decrease, or if it is an older house but that is ready to live, with furniture and artifacts in perfect condition.
Considers that the value of the valuation does not correspond to the real price of the property, since in general, it may be lower. However, knowing how to appraise a property and having a little intuition allows you to put your expectations into a more realistic framework. We suggest that you also take advantage of this instance to review the minimum income necessary to meet the cost of a mortgage loan.
Contact adelaide property valuers to simulate your requirement. You can project expenses, interests, terms of your financing and make an intelligent purchase.
In case you are interested in selling, using the valuers gives you a real idea of how much you can expect for your property and keep expectations under control.
Also read: How To Invest In Real Estate
