Property or real estate valuation entails determining the economic value of a property. Valuing a property is necessary to arrive at decisions pertaining to a variety of property-related activities, including buying/selling, real estate insurance, property transfers, investment analysis, taxation and financing.
The sales price does not necessarily correspond to the fair market value. Four key aspects of a property drive its value. The first is demand, which refers to the level of interest and purchasing power of the participants in the market. The second factor, utility, signifies real estate's ability to meet the needs of prospective buyers. Scarcity, the third factor, assesses the limited or abundant supply of real estate. The fourth characteristic is transferability, which refers to how easily real estate can be legally transferred to a new owner. Last but not the least, buyer’s and seller's perspectives also affect the final valuation.
The Need for Property Valuation Services
Here are the key reasons why property valuation services are crucial:
To assist in taking decisions related to the purchase /sale /transfer of property
To Insure a property
To aid in taxation
To assist with property litigations
For compliance and specific corporate requirements
To mortgage property as collateral for loans or corporate debt
Different Approaches used in Property Valuation Services
Detailed data collection is required for an accurate appraisal. Individual data pertaining to the specific property, as well as general statistics relevant to the nation, area, city, and location in which the property is located, are collected and reviewed in order to arrive at a valuation.
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