Valuation of your own property is critical. Often, it is not done with due care and judgment, leading to a faulty valuation assessment. Any project financing based on your property primarily depends on the valuation amount in the current market.
The professionals do a thorough job, and several options for property valuation services are available in the market. The valuation is primarily done by reviewing nearby property sales, analyzing market trends, and finding the best approach to marketing the property. Several other factors are also taken into consideration.
Methods of Property Valuation:
There are several agencies available in the market that specialize in the valuation of the property. Though the approaches may differ, they all depend on a few common indices to assess the valuation of any property. They can be summarized and categorized in the following manners:
Comparable property method:
In this process, similar properties in and around your neighborhood are considered. The average value per unit area sold in the neighborhood is multiplied by the actual location of your property. Then, adjustments are made based on specific advantages or disadvantages of the property.
Discounted value of the rentals:
In this process, the projection is based on the future real estate growth capacity in the area where the property is located. It includes the potential supply of properties in the same location and the scope of capital inflow in that area soon. This is done to ascertain the future rental appreciation of the property in question. These future capital flows are discounted to the present in commensuration with the current interest rate. This, in turn, provides an estimate of the property’s valuation.
Valuation Service Providers:
There is no shortage of service providers in this sector. With the advent of the real estate boom and the scarcity of good real estate property, this has become a booming profession. Selecting the correct agency to assess your property is very much necessary. As this requires area specialization, choosing a local agent over a fancy one is always advisable. Additionally, experienced and reputed service providers are time-tested and can be reliant on at any point in time.
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The Necessity of Property Valuation:
Most home finance agencies and banks require a valuation of property approved by a certified valuer in addition to the ownership of the property. As security for any loan is mostly evaluated against the existing property, this becomes obligatory. Moreover, the remaining life of the property and liability, if any, are also required to be estimated for proper loan assessment.
A seal of approval from an established valuer is a basic requirement for many corporate clients. In a nutshell, if you are interested in valuing your property in the market for any specific project or any other reason, it is always judicious to take the help of a professional property valuation service. This will bring about the true potential of your property and assess your financial status simultaneously.
