While appraisals are generally performed by skilled professionals, anyone involved in a real estate transaction can benefit from gaining a basic understanding of the different methods of valuation.
Making an investment in property is only an attractive option because you assume you will gain good returns from it in the future. However, to see the value of your property rise, you must make sure it is valued correctly, and by a trusted appraiser whose valuation will be widely respected. When you use professional and independent property valuation services, you get a properly estimated value of your property. Accurate real estate valuation is important to mortgage lenders, investors, insurers, tax collectors and buyers and sellers of real property.
Valuation services are available for different types of property and are not restricted to residential property. You can find professional appraisers for offices, retail outlets, industrial estates, hotels and any other real property. Businesses can also be valued.
For most people, determining the asking or purchase price of a property is the most useful application of real estate valuation.
How is a Property Valued?
A professional property valuation report includes all valuable features of the property and helps you, the owner, and prospective buyers to understand its exact current condition.The goal of an appraisal is to determine a property's “market value”: the most probable price that the property will bring in a competitive and open market.
An estimation of your property’s market value should consider any prior valuations of your property, suburb valuation trends, owner information, selling history, transfer history and comparable sales in the area.
The property valuation gives an estimated market value of a property which is determined using various property industry sources, such as information from the relevant Cadastral office where the property’s title was certified, recent sales statistics, property specific details and relevant price trends.
Unlike many consumer goods that are quickly used, the benefits of real property are generally realized over a longer period of time. Therefore, an estimate of a property's value must take into consideration economic and social trends over time, as well as governmental controls or regulations and environmental conditions that may influence that value.
A professional valuation will, therefore, consider:
-The demand for that property - the desire or need for ownership supported by the financial means within the market to satisfy the desire.
- The ongoing utility of that property - the ability of your property to satisfy future owners' desires and needs.
- Scarcity –that is, the finite supply of competing properties of a similar type and description.
-Transferability –finally, the ease with which ownership rights over your property are transferred.
A comprehensive and respected valuation report will serve you in many ways. Here are just a few:
-Selling your Property: If you want to sell your property and need to find out the appropriate price, using the services of a property appraiser is the best choice.
-Buying Property: When you are interested in buying new property and need to make a pre-purchase assessment of it, you can find all the information that you need by taking up the services of a property appraiser.
-Joint Ventures: When entering into a JV, it is crucial for both parties to understand each other’s true value as a business partner, and an independent appraisal of all assets that will be shared in a JV is the only way to protect both parties’ interests.
-Tax Compliance: In case of a matter related to tax payment, a valuation of the property by property valuators is necessary to determine tax liabilities fairly and openly.
-Assessing Rental Rates: In a situation where you wish to lease out your property and need to set an appropriate rental cost based on the qualities of your property, a property valuation service will be useful in determining the amount based on your property’s market value.
-Legal Settlements: For settlement of property rights between members of the family, matrimonial settlements, litigation settlements, etc. you need to know the appropriate value of the property in order to divide it fairly.
-Mortgages and Loans: In order to borrow money from the bank, you need to provide information of your real assets by which you can guarantee the loan. A good valuation will help guarantee your next loan or mortgage.
-Insurance: When you have to get the value of your property for the purpose of insurance coverage, nothing can get the matter through faster than hiring the services of professional property appraisers.
-Increasing the Value of your Investment Property: By understanding how your properties market value increases according to the criteria of the valuation report, you can upgrade features of the property to increase that value in time for the next valuation. A valuation report allows you to objectively analyze your property, and any business ventures attached to that property, and improve its market value.
Ready to find a property valuation expert? Look no further!Through Realestate.com.kh’s Valuation application page, we can put you in touch with a professional property appraiser near you, suitable to your property valuation requirements. Our valuation experts are skilled in appraisals of all kinds - including land, residential, commercial and retail property appraisals.