A real estate appraisal, also known as a property appraisal appraiser or land appraiser, is the practice of evaluating the value of real property on land, generally its market value, value in use, insurable value, investment value and liquidation value. These must be done to know the correct value of a property before making decisions.
A real estate appraisal is very important for investors. An appraisal is a third party that will come in and decide on the value of a property. They will oversee the interior and exterior of the property and other properties in the area and then proceed to determine how much the property will be worth. An appraisal is done for both buyers and sellers because, while the buyer does not want to overpay for a property, the seller does not want to sell their property for less than its value. It is highly recommended to buy or sell a property after it has been appraised.
Property valuation is carried out by an approved or qualified valuer (also known as an estate valuer or land valuer in most countries and in British English as a “valuation surveyor”).
The appraisal of real estate is done using various methods, such as: cost method, income method, and sales comparison method.
The cost method involves the estimated cost of improvements to the property, the value of the land, and deterioration factors.
The income method is used to value commercial and investment properties. This approach is generally considered the most applicable valuation technique for income-producing properties.
The sales comparison method compares the sales prices of similar properties that have recently sold.
Doing a proper appraisal with several methods explained above will help you to know the correct value of a property so you don’t overpay for a property or sell it for less than it is worth.
