property valuation, land valuation or real estate valuation is a complex process of determining value for your real estate, often used as a preliminary step to closing a deal. Real estate sales often require valuations because all real estate is unique and because they take place infrequently, because each property is individual, rather than like stock, that are traded regularly and are virtually identical. Property valuation is also needed in the United States and Canada because property taxes are based on the value of the real estate.
In Canada, because of property taxation, the value of the property determines its tax bill. In the US, however, the value of the property does not determine how much taxes are paid. In fact, many of the major US states have a cap on property taxes, so that the amount paid is at least adequate for maintenance and upkeep of the property. Valuing the property tax bill can help you determine whether the property will be a good investment.
Most realtors make a point of valuating their properties and the realty for sale when considering a new home purchase. Some of them do it by hand, while others prefer to use computer software. Some realtors work with mortgage lenders to determine the value of the property and the mortgage loan. Others rely on other professionals, such as banks and financial institutions, to figure out a property’s value. In this manner, you’ll find that some realtors get more commission from the seller than others do.
There are different ways that you can conduct property valuation, depending on your expertise and on the nature of your work. You can use computer software to do the job, but if you have little or no experience with it, you may find that it can be confusing. You can hire an appraiser to come into your office and assess your real estate, but you won’t get a more thorough analysis if you don’t know a lot about it yourself. If you need to do a lot of work on the project, or want to work with a particular type of appraiser, then hiring an outside evaluator is recommended. There are many firms available that specialize in property valuation, and one of them may be able to help.
Appraisal prices are determined by many factors, including the location of the property, type and location of building and size of its structure. Also important is whether the structure has any built-in depreciating features, such as siding or a barn, that would reduce the worth of the property over time. The value of the land also influences its value.
The best thing about hiring a realtor for your property valuation is that he/she can explain all the methods and formulas involved in the appraisal process. Realtors can also help you understand some of the terms used to determine the values of real estate.