Real estate appraisal refers to the opinion on the value of a real estate property by an appraiser. Each real estate property is unique and hence it is prudent for any buyer to seek the services of a real estate appraiser to give them an opinion of the property’s value before entering into any sale-buy agreement with the owner. It can be frustrating to enter into a buy contract and pay some deposit on some deposit on for a real estate appraiser to tell you that the value of the property is less than what you had agreed to offer on the property and this can cause the bank to decline granting you a mortgage.
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. A few of the factors are unique to each property while others are same across the board. These variables include; location, surrounding properties, demand, condition, age of the property, among 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 may find that real estate properties situated in places which have access to various amenities are appraised higher than those whose access to such amenities is not all that rampant. For instance, properties located in places with access to quality schools attract many high-caliber buyers with school going children and this will increase demand for such properties thus essentially leading to higher prices. Likewise places with proximity to local employment opportunities may attract higher prices.
The surrounding neighborhood also plays a key role in determining the value of any real property. If the property is located in wealthy neighborhoods, then its value may be greater. Also the demand of estate property will determine its value. 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 land is the cost at which such land can exchange at a competitive real estate market. Basically, market value is the estimated amount of money a liability or asset could be traded at a particular valuation date between 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 denotes the quantity of money of the property covered by an insurance policy and doesn’t usually involve site value.