Let’s imagine this scenario: you’ve just inherited a property from a loved one. In most cases, especially when you’re selling a property, you’d talk up how much the property is worth. This is different when you’ve inherited the property, though.
Property heirs are quick to talk down the value of a property as soon as they get their hands on it. This is where you’ll need property valuation services.
Property valuation helps you determine the market value of a real estate. In some cases, this can even help you determine an accurate figure for the property. So, what goes on during the valuation process?
Let’s take a look at the process below:
- It starts with the physical attributes.
One of the first things that a valuer looks at when doing a property valuation is the physical attributes of the home or building. They conduct an interior and exterior inspection of the property, noting the assets, the detriments, and the surrounding neighborhood into their report.
Some of the physical attributes that might be considered are: location, living space, quality of construction, current condition of the property, landscaping, amenities, and any recent renovation.
- Valuer compares rates on the market.
One of the important aspects of property valuation is to get data on the market. This makes it easier for executors or property inheritors compare sales data and information regarding the property. Again, this comparison to current market rates will depend on a number of factors.
- There are different approaches to property valuation.
Different property valuation services use a range of approaches to get accurate appraisal for a property. This can be:
- Sales Comparison Approach: Commonly used for appraising single-family homes and land. This involves comparing the inherited property with other recently sold properties that have similar characteristics as the former.
- Cost Approach: Used to get an estimate of the value of a property that has undergone any kind of improvement – it has separate estimates for the value of the land and the building. This approach is mostly applicable to properties that are not frequently put on the market and are not income-generating.
The bottom line? It is important to get accurate property valuation to identify how much you’re actually getting from your inherited property. You can do it yourself, but it’s better to leave the work to those who know what they’re doing when it comes to property asset management.