by FranchTips to calculate the value of your property.
The value of every product in a market economy is based on a cost estimation process. Builders and resellers incorporate hypothetical values and hope to find buyers with similar valuations.
There is no authoritative science behind how to calculate the exact value of a property. However there is a basic framework which can be followed to assess the value. The various methods are explained briefly here.
Nearly every market valuation comes down to few factors:
(i) Real estate appraisals and
(ii) Recent sale of similar properties
(iii) Guide line value
Real estate Appraisals
An appraisal is carried out by a licensed professional , knowns as an valuer or appraiser. The job of an valuer is to consider several factors and come up with a realistic value of the property. Usually, banks use valuers to evaluate the property value before deciding on financing a property or approving a loan to a buyer.
Recent sale of similar properties
Comparable sales is the most common way to arrive at market value. If prices of recently sold homes that generally match the same criteria as your own (e.g., in terms of size, number of rooms, amenities, etc.) are high, you are likely to also get a more favorable appraised value.
Guide Line Value (GLV)
A guideline value is the value of a property that is set by the local authoritative body. Anyone that had tried to purchase or sell real-estate will be familiar with the significance of GLV. It is the price that the property would sell for in the open market under usual circumstances.
Of course, the supply and demand for a home in a given region will play into these economic evaluations, as well as the state of the broader economy in terms of GDP growth, unemployment, and inflation.
