When we think of selling a property, we always wonder about its value in the local market.
This approach requires effort, and certain factors must be considered while finding your
property’s worth. In this scenario, an Appraisal is a great way to analyze the local market
and get detailed information about the recent sales in the neighborhood.
This article will discover an appraisal and how it works in real estate. We’ll go through the
complete process of property appraisals and important factors that need to be considered.
So, let’s dive deep into it and discuss Appraisals in detail.
What Is Appraisal In Real Estate?
Appraisal is the estimated price of a property in a market at the current time. This process is
carried out by running a Comparative Market Analysis (CMA). Similar properties in the
neighborhood that sold within 90 days play an important role in determining the net worth of
your property. You’re living in an area where few sales took place. Then, the method of
Comparative Market Analysis will need to be more efficient to fetch accurate data. In this
scenario, real estate agents may extend the comparison search period. So, there is flexibility
in search periods of neighboring properties, and those 90-day periods can extend up to 6 or
12 months, depending on your local market conditions.
What’s The Purpose Of Appraisal In
Real Estate?
As we’ve already mentioned, the main purpose of appraisal is to figure out the estimated
value of your property, but there are other purposes. The appraisal also helps determine
how much value renovation of your property can add to its net worth. In addition, appraisals
are essential to identify ways to add value to your property before selling. Appraisal can help
you determine your property’s selling points and the approach towards this strategy to sell
your property at a a high price. However, it’s just an estimate with no legal standings, and
most real estate agencies offer this as a free service.
What’s Involved In A Property
Appraisal?
Real estate appraisals involve many factors that will help determine your property’s
estimated market value. Some of the most important factors involved are:
Location:
Location matters, and real estate agents emphasize it. An agent will look at the streets your
property is in, and the local amenities are of great importance as well. Public transport and
school catchment areas are thoroughly considered. However, if your property is far from
everything, that doesn’t mean it will be sold cheaper. Sometimes, buyers look for a property
with a peaceful and quieter surroundings.
Size Of The Property:
An Appraisal involves the property size, which a real estate agent measures. It includes the
size of the structure on the land, the size of the block, and other spaces within the property.
For example, an agent will visit the property to see how large the living room is or how wide
the house’s lawn is. In addition, the agent will also look at the outside area to check whether
there is a parking area and how much area it covers in a house. Then, the agent will
compare these size measurements with other properties in your area.
Number Of Bedrooms:
A higher number of bedrooms means a higher price for the property. Well, it’s not only about
the number of bedrooms in a house; the real estate agent will also consider the size of the
bedrooms. They may consider that an attractive view or any other engaging thing about the
rooms can significantly impact the property’s market value.
Required Improvements:
Every property needs some improvement, but some imperfections need to be improved.
Real estate agents are experts in analyzing property to suggest what needs to be improved.
Depending upon the property’s condition, these improvements may vary from simple paint to
reconstructing the entire block. These efforts you make can make a world of difference to the
price before and after renovation.
Fixtures And Fittings:
When you’re selling a property, it doesn’t mean you’re selling everything along with it. For
example, light fittings do not necessarily need to be included. The agent will look at the
fixtures and fittings and ensure whether they will be included in the sale price.
Structure Of The Property:
Better structures get you more money; it’s as simple as that. A buyer is more likely to
request a building report; if it’s not in a strong condition, the report will show the results.
However, your property doesn’t need to be in perfect and modern condition but needs to be
built better.
Ease Of Access To The Property:
Ease of access to the property means access to the front door, access to a car, and utilities.
Most people often ignore this factor, but a potential client will always consider ease of
access a major factor.
Planning And Restrictions In The Area:
The real estate agent will look at the area near your property to see if there are any
restrictions in planning in your particular block. This factor is also going to have a significant
impact on the market value of your property.
Market Conditions:
The market condition will always dictate the value of your property. An agent will observe
your area’s market conditions and recent sales to get an idea of your property’s price.
Overall Presentation Of The Property:
The property you sell needs to attract buyers with its exceptional presentation. The overall
presentation of the property can be enhanced using rented furniture or other ideas you may
have.
The Complete Process Of Property
Appraisal
The process of property appraisal involves four steps, including:
Step 1: Booking Your Property Appraisal
Property Appraisals are more likely to be free. A real estate agent in your local area can be
the best person who will give you a better understanding of your property’s value.
Step 2: State Of Your Property
You don’t necessarily need to prepare your home for an appraisal. Real estate agents are
experts and are more interested in the number of bedrooms, size, and the property’s overall
structure.
Step 3: A Property Visit Of An Agent
A real estate agent visiting your property will ask a few questions. And you don’t need to be
afraid to say what’s on your mind. You’ll need to be honest and mention all the renovation
needed and what you’ve done to maintain the house in good condition. You may also ask
questions from your agent, such as how they will plan on marketing your property. So, The
conversation between you and your agent needs to be smooth and comfortable.
Step 4: Appraisal Figure And Supporting Documents
Your real estate agent will visit your property again at a price they believe suits the market. It
will also include supporting documents, such as sales of comparable nearby properties
within the last 90 days and a summary of market trends.
Why Should You Get A Property
Appraisal?
Remember that appraisal is not always about selling a property. It can also be about
determining the worth of your property in the current market. An Appraisal can help you
figure out the estimated price after you’ve renovated the property and now want to check the
worth of your property in the market. Similarly, if you are willing to upsize or downsize your
house considering your family requirements, then you’ll also want to know the worth of your
property after doing that. Some of the main factors that require you to get an appraisal
include:
Family Requirement:
When planning to start a family, your needs will change over time. You’ll need more space in
the house. Then, you’ll have to plan for upsizing your property and an appraisal to know the
worth of your updated house. On the other hand, if you don’t need a family home anymore,
the same approach is followed here as well.
Financial Reasons:
The change in financial condition is one of the most common reasons many people decide to
sell their property. When you don’t have enough investment to improve your property, getting
an appraisal is a good option to get an idea of your property’s worth in its current state.
Location Changes:
Certain factors engage you in an appraisal of your property. For example, you have a job
miles away from your house and can’t be there on time. In this scenario, considering an
appraisal for your property is the best option.
Final Thoughts:
The good thing is that appraisal isn’t just about estimating the property’s worth and selling it;
it is done for many reasons. It is done to know the worth of renovated property and for tax
purposes when valuing charitable donations and other reasons. Still, the most familiar form
of appraisal is for a property. In addition, it is significantly important to consider the factors
involved in property appraisals. Your real estate agent will focus more on the structure,
number of bedrooms, and ease of access to the property. And all of the factors explained
are of great importance in deciding the worth of your property.
