There are quite a few things that must be kept in mind when buying or selling a property. Emotions and sentiments apart, there are a few practical challenges and difficulties that have to be overcome along the way. Unlike buying or selling other movable or immovable properties there is no doubt that buying a real estate property has quite a few formalities and processes. Whether it is identifying the right buyer or seller, the right location or buying or selling at the right time, it is a combination of both art and science. Hence, as a customer one should be aware of the various formalities that have to be gone through only after which the ownership of the property can be transferred from the seller to the buyer. One such process that is considered extremely important is property valuation. Let us try and find out why it is so important and even mandatory.
Whenever we buy or sell a property we know that we are putting at stake thousands or even millions of dollars. Hence, it is important for us to be sure that we are buying the right property. As a seller we would like to be sure that we are selling it to the right person or entity. In fact valuation at and end of the day has more relevance and importance to the buyer when compared to the seller. This is because of a few reasons. It is the buyer would be more interested to have a clear idea about the fair market value of the property in question for obvious reasons.
The main objective of property valuation at the end of the day is to give a correct picture about the fair market value of the property that is being bought. Towards this objective the property valuers and appraiser use many methods and tools to arrive at the figure. They also take various inputs such as location of the property, size, age of the property (not land) and many other factors. They also use various types and methods of valuation depending on the type o the property and the specific requirements of the customers. Apart from expressing their opinion about the fair market value of the property they also add a bit of subjective information such as the infrastructure development in the area, amenities and facilities, quality of people who make up the neighborhood and other such details.
There is no doubt that when we decide to invest in a real estate property we would always like to be doubly sure about certain things. Apart from being sure about the legal status of the property and the ownership, we would also like to be certain that we are buying the property at the right price. What exactly is right price or wrong price is very subjective in nature and could vary from person to person or entity to entity. However, there is one common denominator and that is the fair market value of the property. This does not change irrespective of what is considered as the “right” value for the property in question. To ensure that there is a correct representation of the fair market value of the property, the role of property valuers and appraisers is extremely important to say the least. In this article we will try and have an understanding about basic real estate valuation which will help buyers and sellers in more ways than one.
The value of a property is dependent on various factors such as its location, age, size and other such factors. The kind of interiors, the quality of the garden and backyard, the level of interest shown in environment protection and other such matters also have a bearing on the basic valuation of the property. Hence, when valuing a property it is very important to take these basic factors into account. These are the main inputs that will have a bearing on the fair market value of the property.
Further the legal purity of the property has to be also determined. Though this is mostly done by property lawyers and attorneys, real estate valuers cannot wash their hands off it. Hence, almost all valuers make it a point to have a manual inspection of the property and this is considered a basic necessity. Such manual inspection will help uncover some hidden easements and other encumbrances which may not be possible to find out through a desktop valuation or a kerb side valuation. The above inputs are the main factors that help the valuers to come out with a fair market value of the property.
On the other side there are other emotional and external reasons that could also impact the value of the property. For example, if the property is ancient and reminds a person about his roots he may be willing to pay something more for it. However, such acts usually will not feature in the valuers reports.
While there is no denying the fact that property valuation and even mandatory in most cases, there are some myths and untruths surrounding it. As customers we should be aware of the same so that we are able to us property valuations by the best valuers to the right effect rather than being taken in by some high-sounding advertisements. Most of these myths usually revolve around the various other constructions that we usually have in our homes. Many property builders and promoters charge customers quite a few thousand dollars more just by convincing them that there is a lot to gain by such constructions.
The most common myth is that swimming pools have a big role to play in increasing the valuation of a home. This is partially correct and therefore it should be given the importance only to the extent to which it deserves. There is no point spending thousands of dollars on special types of swimming pools in the hope that you would be able to increase the value of the property by thousands of dollars.
Secondly it would be wrong to assume that all bank valuations are wrong. It has now become a generally practice for almost all customers to appoint their own property valuer despite the fact that banks go through their own property valuation. You have to bear in mind that property valuers (especially the professional ones) work independently and not at the behest of banks and financial institutions. A good and professional valuer would not like to stake his reputation and goodwill by manipulating a valuation report to suite banks’ interests.
Adding extra bedrooms are often considered very important for increasing the value of home. This again is a myth and there are no reasons to support this theory. As property prices soar, customers are looking for cutting down on floor space and would be content to do with single bedrooms. Further, as families become smaller and smaller this theory does not seem to cut ice with many valuers.
Last but not the least many customers often neglect the gardens and backyards believing that it is the insides which commands value. This again is based on wrong information and logic. Quality conscious customers pay a lot of attention to the quality of gardens and backyards and hence this should be given the importance that it deserves. Further it would be wrong to assume that landscaping and garden maintenance is an avoidable expenditure.
One of the most important aspects of any property buying and selling is property valuation.Whenever a property is bought or sold there are many steps that have to be gone through. Valuation is considered to be one such step. The main objective of any valuation is to ensure that the stakeholders get the right information regarding the fair market value of the property. Further there are some important statutory requirements too where the valuations by the best valuers report has an important role to play. Property tax amounts are calculated based on the valuation reports. The same is the case with stamp duty amount payable when a property is transferred from one person to another. Hence, there is little doubt that property valuation has a very important role to play as far as property buying and selling is concerned.
Since each and every property ownership transfer requires valuation, there is the need to identify the right professional. Identifying the right property valuer is of paramount importance. However, this is not easy because of a few reasons. Most of the customers do not have the right knowledge about the attributes of a good property valuer. secondly, since there are dozens of property appraisers, identifying the right service provider could often become quite confusing.
Hence, in this article we will try and find out the main points to be kept in mind while looking for a property valuer. To begin with, when hiring these professionals, customers have to be sure that they are certified and permitted under the law to perform valuation duties. Secondly, it is always advisable to hire valuers who have a formal qualification, though this may not be mandatory under the law. Thirdly, experience is a very important attribute of a quality valuer. Therefore, it is always better to look for property valuers who have put in at least ten years of service in this line of business.
A good property valuer is one who can handle almost any type of property valuation. While there are some simple valuations, on the other end there are quite a few complicated valuations. A few examples include backdated or retrospective valuation, valuation of properties for the purpose of government compensations just to name a few. Further, when hiring valuers, customers have to be sure that they have the right tools and use the right methods for valuing properties. Finally it is important to hire valuers who can offer good value for money and ensure timely services at all points in time.
Given the high levels of competition, it is extremely important for property valuers to find out new ways and means to stay relevant in the business. While the time tested methods of reaching out to new customers is still very much relevant, it is important to take into account the changing customer habits and preferences. It is therefore important to tweak the business model if required so that as valuers we are not found wanting for new customers.
The internet without any doubt plays a big role in helping customers to look at products and services from close quarters. It offers them multiple choices and hence they are always willing to spend some time and make the best choices. As far as valuation is concerned, customers are today looking for comfort, convenience and saving of time. They are ready to hire those professionals who are able to offer the above three as a total package. Hence, if you are an ambitious property valuer who wants to move to the next higher level of success it is important for you to understand the power and reach of the internet. You must make use of this medium to reach out to new customers.
The next important tip that could help in taking valuation business to higher levels is the need to take part in various web competitions and events. This is now becoming an important tool to increase visibility of websites and bring in more traffic. You should not only actively participate in such competitions but if possible you must try to be a prize winner. This will certainly set your popularity on a high and you will be able to reap the benefits of the same. However, you should be careful about choosing the right type of web awards and should associate only with those who have a good reputation and goodwill.
Becoming members of chambers of commerce is another time tested way by which you can move your business to the next higher level. This is perhaps one of the most cost effective ways of advertising your business and reaching out to newer prospects. Since most chambers of commerce keep organizing many shows, seminars, exhibitions and other such events it is the idea place where you can show case your talent and credentials as a property valuer. Last but not the least, you should also try and become a member of like minded associations and communities that have many valuers under one umbrella.
Whenever a property is bought or sold quite a few processes and steps have to be gone through and valuation is one such step that is extremely important. That is the reason why property and real estate valuation is such a big business even today. However, doing valuation business today is not the same as it was some years or even a few decades ago. Quite a few things have changed on the ground. Competition in this business has increased by leaps and bounds. The financial collapse of 2008 has left behind deep scars and many valuers have not been able to recover from it. Even a few years back it was a classic case of too many valuers choosing too few customers. However, things have started looking up a bit now. But still the market place is extremely crowded and there is jostling, pushing and shoving for an inch of toe hold space in this competitive market.
It is therefore important for valuers to find out ways and means by which they can move their business from one level of success to another. The best answer lies in finding out ways and means by which modern day valuers can make better use of the internet and other modern day technologies. Thought use of the internet technology today might look like an alternate choice to do business, it will not be long before it becomes an absolute necessity. Today’s customers as we know are very hard pressed for time. Under the circumstances, the onus lies on the valuers to find out ways and means by which they can make life easier for customers as far as valuation is concerned.
It is therefore now becoming extremely important for real estate valuers to find out ways by which they can offer online valuations. This will certainly go a long way in making life easier for customers who can have their valuations done sitting in the comfort of their homes. However, offering online valuation is no as easy as it seems and it requires putting in place quite a few things. The back office processes must be totally automated before one can think of offering online valuation. Or else it will be a case of putting the cart before the horse.