Buying or selling a residential property involves a handsome amount of money and thus you must conduct property valuation. This process allows a person to know the accurate value of an immovable asset and hence it reflects in value for money of a property. So, scroll down the post and know everything about property valuation now.
What is Property Valuation?
Property valuation is a fair market value of a property at which a seller and buyer are ready to close the deal. This price is usually reflected by the market trend and circle rate but many times the same can differ from the trend.
Elements of Property valuation
This concept is based on four pillars mainly and first amongst them is Demand. The property cost largely depends upon the demand for such residential units and the price at which the buyers are willing to purchase the same. The second is Utility. This component assesses if the property can fulfill the requirements of the prospective buyers means if the asset is relevant to the living needs of the buyer such as its connectivity, power and water supply and security. The third is Scarcity, this element checks if there is ample availability of such properties within the real estate market of the specific zone. The fourth and last element is Transferability. This element examines if the property title is clear for the new owner or not.
Benefits of Property Valuation
- Accurate Tax Assessment is an advantage of property valuation as this process allows a person to calculate correct municipal tax, rent tax, wealth tax, property tax, vacant land tax, etc.
- Mortgaging of Property becomes easy with property valuation as the person can borrow a loan amount that is equal to the asset value. Thus, you are not required to depend on someone to avail funding for any purpose in life.
- Property transfer becomes easy as a person is required to estimate the asset value which is going to be owned by someone else in the future.
- Renting a property is another benefit as the property valuation allows a person to know the accurate value of the immovable asset according to which the rent can be fixed. Usually, the rental value is between 8-10 percent of the property value.
- Acquisition by authority becomes easy in case the property owner declares him/herself bankrupt. The property valuation let the authorities complete the process to acquire the asset in a better way.
Factors that affect Property Valuation
The factors that affect property valuation include its location, amenities, features, carpet area, property segment such as affordable, premium, luxury.