Things to know before selling your property

Things to know before selling your property

The value determined by the valuer is final

To understand why this is a misconception, you need to know the meaning of the value of a property. The value of a property does not mean the price said piece of property would fetch in a competitive market. It has more to do with the worth of a property which is calculated by assessing factors like the future profits, the utility of the property, how easily it can be transferred from one person to another, etc.

There is a scope of negotiation regarding the selling price of a property. It is possible to go lower or higher than the price fixed by the valuer. The only thing that matters is that both the seller and the buyer reach an agreement. To understand the supply-demand better, let us have a better look at it in the next section.

If you’re still not satisfied, you can change the valuer, or make some changes to the property (like getting it renovated and cleaned before appraisal).

Property valuation is arbitrary

While it is true that property valuation is not an actual science, it is not at all arbitrary. The valuation process is subjective. There is no single formula that works for every property.

You might ask how many variables are involved in a typical process of valuation? The answer is a lot. Things like the location, street view, availability of open space, etc. are considered in determining the value of a property.

There are several methods that valuers use to arrive at the value of the property. Different types of properties call for a different approach.

The most common methods of property valuation are:

  • Sales Comparison: In this method, the information on recent sale/purchase of properties similar in size, amenities, and located nearby (preferably the same neighborhood) is compared.
  • Cost method: In this method, the market value of a property is calculated by adding the land cost and the cost of construction of the building. The depreciation (if any) is then deducted, from the total cost.

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