How To Determine A Property’s Value
Knowing the value of a specific property can be advantageous to both buyer and seller. A seller can price his or her house fairly if they know what the property’s worth is. Also, a buyer can determine whether a house for sale is a good deal or not based on the value. But, the question becomes: how can you determine what the value of a property is?
There are a couple of things you need to know about determining a property’s value. Below are some ideas on what to look for in case you go house hunting or if you’re planning to sell your property:
1. Comparable Sales
Comparable sales are the sale prices of similar properties that have been sold within the area. So why should a buyer or seller care about comparable sales? It can be used to determine the value of a property or used to negotiate or justify the price of a property. There are a few ways on how you can get comparable sales information:
- Local assessors’ offices
- Online databases like Zillow
- Local newspapers, specifically the business section where you can find real estate reports.
- Real estate agents, if they’re willing to share information on the houses they’ve sold.
2. Property Information
Property information is, of course, a basic factor. Whether you are a buyer or seller, you have to know details about your property. This can include the year it was built, how big it is in square feet, the lot size and so on. The property’s information will be your bases for finding similar properties that have been sold in the past month or so.
3. Carrying Cost
Carrying costs are basically the expenses you pay for maintaining a property. For example, expenses on utilities, property taxes, maintenance costs, repairs and mortgage payments can be part of carrying costs. All of these will affect a property’s value because it can be a basis to recognize the decline in value of a property. No one wants to pay a high price for a property with thousands of dollars in carrying costs therefore the value is affected.
4. Seller Motivation
This last one is specifically for when you buy a house or any kind of property. To understand what the value of a house or property is, you have to determine a seller’s motivation. For example, has the seller bought and moved into his or her new house already? If yes, then this person would want to sell off the old property as soon as possible to avoid paying two mortgages. A seller’s motivation can be high if they need funds immediately due to a family crisis. This can affect the value of a house because it can either go lower or higher depending on what the motivation of the seller is.
Now that you’ve read the different factors that can affect a property’s value, do you think that you can do your own research to determine what the value of a property is? If you are looking for some tips on how to sell your house, check out our blog on 5 steps to selling your house.