The Basics of Real Estate Evaluation
In short, an appraisal of real estate, or a property evaluation, is an assessment of the potential market value of a property. If you are looking to sell your home, or a piece of property, having an appraisal made by either real estate agent, or an independent evaluator, is absolutely necessary in order for you to get a realistic idea of what your property can sell for, and aids you in setting a baseline price to sell.
This is a very important step if you are considering selling off any of your property, as these types of decisions are often some of the biggest ones we can make in our lives. This makes the proper appraisal of your property an absolutely essential step, before you finally commit to selling your property.
How do Evaluators work?
An evaluator can assess the value of almost anything, including land, buildings, extensions and improvements as well as other factors, either past or present, which can alter the value of your property. The majority of evaluators work independently and have no predisposed interested in the properties that they evaluate.
Price and Value
There is a distinct difference between the actual worth of a property, often referred to as “Market Value”, and what it will actually cost to buy the property, referred to as “Price”.
The price that is actually paid for the property, whether it is lower or higher than the estimated value, does not represent or affect the actual market value of the property. This is often true in the cases where there are special, or prior relationships, between the buying and selling parties, where one might have significant influence over the other, or where a pre-arranged deal might affect the actual sale price.
In alternative cases, these transactions might have been one of several properties that are in transaction between the two parties. This is just one example where the property’s price does not affect the property’s actual “market value”, but is rather the “market price”
Other uses for Valuations
It doesn’t matter whether you are trying to buy, sell or renovate a property, having an evaluation done can help you prepare and make an informed decision that can save you your precious time and money in the long run. However it is not just limited to matters of real estate, evaluation might also be required when you are entwined in a legal dispute that involves property, taxation, or for self-managed super and insurance purposes.
The following is a list that details the many number of uses of where a property evaluation might be useful outside of real estate:
- Mortgage and Refinancing
- If you are the seller: Price and Reverse Price Setting
- If you are the buyer: Ensuring your purchase is of good quality and value
- Insurance Assessments
- Divorce Settlements
- Business Dissolutions
- Capital Gains taxation calculations
- Stamp duty calculations
- Estate and Probate proceedings
- Rental Evaluation
- Portfolio Reviews
- Analysing current market values
- Analysing prior market values
If you’re looking for more information on Real Estate Valuation and Evaluation, find what you’re looking for, as well as contact details and locations on AussieWeb.com.au.
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