Real estate appraisal – an important step in the process of buying and selling real estate
By real estate valuation we mean estimating the price of the property. It is clear that the seller's goal is to sell the property as quickly and at the best possible price, but misconceptions about the real value of the property are often a big problem in the sale process.
Sometimes it is a house to which the client is emotionally attached, sometimes an apartment in a good location but in an unmaintained building, in some cases the seller considers his neighborhood much better than the market is because he is used to living there, and there is an unavoidable "neighbor" who sold his property at a dizzying price.
In addition to the above situations in which sellers overestimate, it is not uncommon even situations where sellers underestimate their property.
Whatever the reason, determining the optimal market price can be crucial for sales. Sometimes it can be crucial to several thousand euros, especially if it is about prices that are close to the "round" number. For example, buyers can search properties in the price range of 400,000 to 500,000 euros, and a property of 503,000 will not even appear in the search. Such finesse can be recognized by experienced agents of the Regent Real Estate team. Our agents with a free and reliable assessment help you to achieve the highest possible position on the market.
What does this entail?
When assessing the value of the property, our experts will visit your property and answer all the necessary questions about its value and the possible interest of potential buyers. This process includes the following steps:
A comprehensive assessment of the property
Our real estate experts will evaluate your home and find the most attractive characteristics such as, for example, location, property size, number of rooms and bathrooms or parking options, and based on the above determine the overall quality and conditions of housing that your home provides to potential buyers.
Location assessment
As an expert in your field, our agent assesses the attractiveness of the location to potential customers. Consideration and analysis takes, for example, distance from educational institutions, trade, transport connections and similar relevant features. Based on the above, we assess the quality of life in this area and state why it is ideal for life.
Recent sales
Our agent evaluates recent sales data in the area of your property, in order to identify similar properties and their selling price. This provides you with additional information about the market and details that may interest you and be useful.
Buyer insights
After selling many properties in your area, our agent has enough experience and knowledge about what buyers are actually looking for, what their wants and needs are and how much they are willing to pay for their new property.
Property price estimate
Based on all the above information, our agent estimates the approximate price of selling your property.
Do I need a property appraisal?
The decision to sell the property is not the only reason for its appraisal. There is no wrong time to know the true value of your assets because it allows you to make better, smarter and more meaningful financial decisions. So when is valuation a good idea?
- If you are planning to renovate a property and want to know what local buyers will appreciate and find most appealing
- You are finishing the renovation and want to know what impact the renovation will have on the market value of your home
- The market is constantly changing, and you want to know how it affects the value of your assets
- You are thinking about refinancing and want to know how much it would increase the value of your home
- You’re considering renting your property and want to know how much rental yield you’re likely to achieve.
What methods are used to determine the value of a property?
There are different methods available for determining the value of your property. As a rule, a distinction is made between three approaches:
The sales comparison method is commonly used for private residential properties for which there are comparable properties. In this case, "comparable" implies that real estate is similar in location and characteristics such as, for example, square footage and layout of premises.
The cost method is used for residential properties with too little or insufficient number of comparable properties on the market. This approach involves calculating the cost of building an estimated property. The value of the property is then determined by subtracting the potential overvaluation that has arisen.
The income method is applied if the property is leased or used commercially. This implies calculating on the principle of how much final income can be expected from a property. This approach is particularly interesting for real estate used as capital investments.
Several factors influence the price at which a property can be offered on the market. These are:
- Location of the property
- Property size
- Number of rooms
- Age, building structure and condition
- Additional features (pool, terrace, garden, garage, etc.)
- Ease of access
- Overall presentation
- Market conditions and recent local sales
- In addition, features such as the architectural style of a building can also have a significant impact on the price of the property. Elements such as designer furniture and decor can further boost demand and increase the value of a property.
When the buyer intends to finance through a bank loan, an official valuation of the property is used.
The valuation of real estate is carried out by authorized permanent court experts and appraisers according to the Law in the assessment of the value of real estate, whose powers derive from special regulations governing the work of courts and expropriation procedures. They are the only ones officially authorized to do assessments used for official purposes.
The market value of real estate is estimated using three methods and seven procedures, and the way in which data is collected is prescribed. There is no rule about how long the assessment takes and how long it takes. It depends on the agreement with the client and other factors. But in practice, the assessment is waited from three to a week. Depending on the complexity of the project and the square footage of the property, on average, the service costs from 200 to 330 euros, but often banks take over the cost of the assessment if it is a loan.
In addition to everything they see in the field and in the documentation, expert witnesses use the eNekretnine system in their work. This is the database in which all transactions in the real estate market are recorded. For each property is recorded area, square footage, type of real estate: apartment, house, business premises, agricultural, building or forest land. In this system, the prices achieved are also seen. Through the eNekretnine system, authorized appraisers and real estate brokers are provided with easy access to data that are the basis for their quality professional work. The database contains data on the number of transactions for a particular area, types of real estate and information about the property that was the subject of the transaction, the price achieved, etc.
Assessment study
The valuation of real estate is clearly and transparently presented in writing or in a document called the appraisal study, which includes:
- the finding and opinion of a permanent court expert for real estate appraisal or
- assessment of a permanent court appraiser
It is an authentic document for decision-making in administrative and judicial proceedings and for making investment and other decisions. The assessment study, which is not made in accordance with the Law and Regulations, is invalid. For the assessment of the value of real estate and the execution of the necessary data are used:
- purchase prices and other data, such as rents, rents, management costs
- a set of features of the property, which are not affected by unusual or personal circumstances.
Whether you need help pricing your property or a professional official appraisal, contact the Regent Real Estate team and together we will find the ideal solution for your specific case.
