Here Are A Few Techniques Used By The Valuers To Evaluate Your Property
Are you looking forward to evaluating your property? Well, then you must have searched for different valuers and valuation techniques. Yet, if you don’t have a finance background, the appraisal methods may seem feverish to you. This is why I’m writing about the different methods any valuation personnel uses. In this article, I will explain the different methods adopted to gauge a property.
But before we begin, you need to have a basic understanding of the real estate business and how the finances work out. So, let us have a look at the basic terms and factors responsible for weighing a property.
Real estate valuation – an overview
Any property is classified into two categories. One is residential, and the other is commercial. It doesn’t matter if you have an empty plot available or an established building. The valuers will categorize them as residential or commercial. The distinguishing factor is the square footage area and the locality.
Usually, a residential plot has a smaller area as compared to commercial space. If the land is registered for a residential project, the valuation will be different. Hence, you now understand the difference between residential property and commercial property.
Now, the valuation of the plot is higher if there is already a standing building. Moreover, the worth increases with extra amenities like furnishings, locality, convenience, and other sustaining factors. So, you now understand the basics of property valuation. Now, let us look at the techniques an examiner may adopt.
Property evaluation techniques and methods
In general, there are five main methods. Each of the methods can be applied to both residential and commercial properties. But, the coefficients of the factors will vary depending upon the following parameters:
- Square footage area
- Distance from the major metropolitan city
- Location of the property – urban, suburb, or rural
- Convenience of commute
- Area amenities like grocery shops, malls, movie theatres, etc., and so on.
Now you must know that the worth of a property is not exactly the price. The price can be significantly higher or lower than the proposed value. Let us jump into the five techniques for valuation.
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