Real Estate Appraisal
The first thing to do for buying or selling a property is to get an appraisal. It is very essential, even you are a first time seller or having lot of experience in real estate investment, you have to get the real estate appraisal before putting it on the market.
The first thing to do for buying or selling a property is to get an appraisal. It is very essential, even you are a first time seller or having lot of experience in real estate investment, you have to get the real estate appraisal before putting it on the market.
Property
valuation or the land valuation is the practice of developing an opinion of the
value of real property, usually
its Market Value.
No two
properties are identical and all the properties differ from each other in their
location. So, the market value of all the properties is not same and in the
absence of market based pricing mechanism, an expert appraisal or valuation of real property is needed. real estate appraisal is performed by a licensed or
certified appraiser.
The real
value of a property is not in its physical appearance hence, an appraisal is
needed. For example, a certain area of land, is allotted the highest and best
value in that area under the commercial lot and if you want to buy it for a
separate dwelling, then the best option for you to be labeled as residential real estate. Because,
constructing a single dwelling in a commercial
real estate property is not
legal. Hence, whether your property is a 2 room flat or a separate mansion, it
is needed to get a real estate appraisal.
There are
three ways for valuating a property:
Cost
approach:
Cost
Approach is also
formerly called as summation approach. Value of a property estimated by summing
the land value and depreciated value of any improvements.
A cost
approach should be done by comparing the analysis of labor, material and other
expenditure with the land value.
The cost
approach is considered reliable when used on newer properties but it is not
much reliable for older properties.
Sales
comparison approach:
To examine
the price of the similar real estate properties in that area. Sales
comparison approach is very reliable if adequate comparable sales exist. This approach
develops value from a purely pricing scheme.
Income
capitalization approach:
Capitalization
approach is used to
evaluate commercial real estate properties. This approach is
considered as the most applicable valuation technique where sufficient market
data exists to supply necessary inputs and parameters to implement this
approach.
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| Neeta Shah
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Email: neeta@aasharealtors.co.in
Shop No. 2 & 11 , Shailesh Apartments,
Borivali West, Mumbai – 400103,
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