Real estate appraisal refers to the opinion on the value of a real estate property by an appraiser. Because of the uniqueness of every real property, it is very important to seek for the services of a real estate appraiser to give you their opinion on the market value of the property before signing any buy agreement. 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 which are frequently traded, real property transactions are infrequent. There are many factors that may affect 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, neighborhood, market, age, condition, amongst others.
To most people, property location is the most important factor they consider when buying real estate. Location per se doesn’t mean the actual place where the property is situated but is determined by other micro-factors such as proximity to various amenities. You might find that real estate properties situated in areas that have access to various amenities are valued higher than those properties whose access to such amenities is limited. For example, properties situated in areas with access to local quality learning institutions may attract many buyers with school going children and this will increase demand for such properties consequently their market values may be higher. Properties located in places accessible to local employment opportunities are also rated higher in value.
The surrounding neighborhood also plays an integral role in determining the value of any real property. If the property is found in rich neighborhood, then its value may be higher. Also the demand of real estate property will ascertain its worth. If there are lots of prospective buyers interested in any specific real estate, then it may attract higher prices as compared to those with few prospective buyers. In property evaluation, there are various sorts of value and definitions that an appraiser looks at. These include; worth in use, market value, investment value, liquidation value and insurable value.
Market value off real estate property is the price at which such property can trade at a competitive real estate 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.