Why is critical to proceed to a property valuation.
The real estate industry contributes to both national and personal prosperity. Every country has its own set of rules and guidelines for property assessment and real estate financing management.
Real estate planning and management also include property valuation. In order to have effective property assessment and transactions, there are several norms and regulations to follow.
For example, property valuers compile a report on the property after taking into account all of the aspects that can influence its value, which then the specific report can be used to complete numerous transactions and negotiations relating to the property.
But first, let’s define property valuation, and then discuss how impartial it is to apply one!
What is property valuation? Property valuation is a detailed analysis of a property’s market value based on its location, condition, and a variety of other variables.
Without essential knowledge on property market trends, it may be impossible for you as a lender to know the amount of money required to buy or sell a home, apartment etc.
Based on The International Valuation Standards the term is defined as the estimated sale price “between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.”
Due to the fact that it’s practically difficult to forecast how people’s emotions, market knowledge and other factors can affect all the negotiations behind property, the purchase/sale price is for the most part different from the figures given in the reports.
Property valuation, on the other hand, provides you with all of the necessary information to assist you in negotiating effectively and receive the greatest deal as a buyer or seller. Why is property valuation important? There are numerous reasons why you should consider getting a valuation of your property. From providing a competitive and fair cost for your property, to calculating various taxes, we go through 5+1 reasons why property valuation is important.
1.To Buy or Sell a Property It is critical to get a property valued before purchasing or selling it, as this can assist you in determining the property’s fair market value.
A property valuation expert will come to your property and estimate its current value in the financial and real estate markets, taking into account all of the aspects that go into determining a property’s value. 2. To Rent a Property If you are looking to rent your property, then a property assessment will assist you in determining a fair and competitive rent for your home or apartment. You’ll need to give your potential tenants an exact cost estimate. The appropriate rent is usually 6-10% of the property’s estimated price.
- To Mortgage a Property Property valuation is also required when a buyer seeks to take out a loan using the property as collateral. The amount of the loan depends on the property’s projected value.
- To Transfer a Property If someone wishes to transfer their property to someone else, they must first determine its value. The stamp duty is determined by the property’s value.
- For Taxation Purposes Property taxes, such as wealth tax, vacant land tax, ground rent tax, property tax, municipal tax and other types of taxes must be paid to various government departments. Therefore the estimated worth of the property must be taken into account when s taken into account when determining these taxes.
- Compulsory Acquisition If a person or a company declares bankruptcy, their assets can be confiscated. In such circumstances, the property is valued before it is purchased or auctioned off, thus determining things such as the auction’s base price. Overall, property valuation is an important “action” to be considered before engaging in any financial transaction involving the sale or purchase of a house, an apartment or any kind of property, as it can assist you in understanding current property market trends, calculating property taxes and getting the best price for your home.
Lambros Kaloyirou BSc (Hons) MRICS .
Urban Keys Chartered Surveyors Ltd .
70, 28TH October Ave 2414, Nicosia, Cyprus.
Telephone: +357 22 27 00 19 .