Property valuation, real estate valuation is the procedure of ascertaining an assessment of worth, for valuable real estate. If you’re looking for more tips, Valuations VIC-Property Valuation Melbourne has it for you. Real estate deals often involve appraisals as they happen infrequently and each property is usually unique, unlike company stocks, which are almost identical and happen frequently. In fact, a business could be considered a real estate investment, when the market value of its equity (the balance between the equity and the amount of debt) exceeds the cost (or value) of the assets. There are two primary approaches to determining the value of a real estate investment. One method is to use amortization; that is, to calculate the present value of the future payments, as opposed to the discounted value of future payments.
The other method is to apply market value. A market value approach is used by most real estate agents. Market value is determined by comparing the current property value to the mortgage rate at the time of purchase, as well as making adjustments for depreciation. When the value of the property at the time of purchase is higher than the mortgage rate, the loan is considered underwritten and the property valuation process begins. The process involves a few steps, including preparing the appropriate documents and taking photographs of the property, or its comparison to other properties in the area, for purposes of comparison.
There are several ways in which a property valuation can be used to facilitate the negotiation of a fair sale price. First, it provides a listing of comparable properties for the buyer to choose from and therefore eliminate opportunities for a seller to ‘game’ the system and underbid or overbid the buyer. Second, by using property valuation, the buyer can ensure that he gets a good price for the house. Third, and not least important, it allows the buyer to set a purchase price before the deal closes, with little or no chance of the seller changing his mind. Once the buyer has decided on the price, he can go ahead with the closing procedure and hand the seller the keys – an important tool in obtaining a good deal on the sale of your house!