Real estate evaluation is the development of an approximation about the value (market value) of any real property. Because of the uniqueness of each real property, it is important to find a real estate appraiser to give you an opinion about the property’s worthiness before entering or signing in buy contract. It can be frustrating for you to make a down payment on a certain property only for the appraiser to tell you that the property’s worthy is less than what you had agreed upon to pay.
Unlike other properties that are traded frequently, transactions pertaining to real estate are infrequent and hence their prices vary a great deal. There are lots of aspects that may impact the price of real estate property. Some of the factors are unique to each property while others are same across most properties. These variables include; location, surrounding properties, demand, condition, age of the property, among others.
To most people, property location is the most important factor they consider when buying real estate. Location is not necessarily the actual place where the land is located but is determined by other micro-factors such as its proximity to amenities. You may find that real estate properties situated in places which have access to various amenities are appraised higher than those whose access to such amenities is not all that rampant. For instance, properties located in places with access to quality schools attract many high-caliber buyers with school going children and this will increase demand for such properties thus essentially leading to higher prices. Likewise places with closeness to local employment opportunities may be valued highly.
The surrounding neighborhood also plays a key role in determining the value of any real property. If the property is located in wealthy neighborhoods, then its value may be greater. Also the demand of estate property will determine its value. Whether there are lots of prospective buyers with interest in a particular real estate, then its value might be greater compared to one with few potential buyers. In real estate appraisal, there are various sorts of value that an appraiser appears at. These include; worth in use, market value, investment value, liquidation value and insurable value.
Market value off real estate property is the cost at which such land (property) can exchange at a competitive property market. In simple terms, market value is the estimated amount a liability or asset can be exchanged on a particular valuation date between a willing seller and willing buyer. Value-in-use is the actual amount of money a true property can generate for the proprietor for a specific use. Likewise, investment value is the worth of a property to a particular investor for a specific investment or use. Insurable value of a property is its value which is covered by an insurance policy and does not generally consist of site worth.