House Valuation – What Is It and How To Calculate It?
For all practical purposes, the value of any property is what the sellers are willing to pay for it. For owners the value of their home could be a lot however, any buyer or a third person might not value that property as much. A house valuation thus becomes imperative to have an objective assessment of the real price that the owners can get if they choose to sell the place.
Valuation simply means calculating the price of anything based on a particular set of parameters. In case of an estate, an apartment or a house, the metrics are precise and a licensed house valuer will know exactly how to determine the price and the yardsticks to use.
What property owners need to understand is that the price at which they sell the house or the apartment is usually different than the value quoted by an expert. The valuation is just a ballpark figure to make you understand the correct price so that you are able to negotiate with the potential buyers better.
How a house valuer calculate the value of a property?
There are many attributes that the house valuers take into account before coming up with a figure. While comparing the recent prices of the properties sold in the neighbourhood is the backbone of any or all sorts of house valuation, it can only provide a large range to work with. Other factors to calculate the value of a house include but are not limited to:
- The size or the precise area of the property
- Types of rooms and their count
- Quality of the fixtures used across the whole house
- The kind of electrical fittings used inside and outside
- Condition of the building and sturdiness of the structure
- Architectural style and the standard of fit-out of the property
- Access to roads and accessibility to the property
- Local council zonings and planning restrictions if any
- Levels of amenities available and their accessibility
- The total size of the land
- Topography, aspect and the layout of the whole block
How do independent house valuers come up with a figure?
All the independent house valuers begin their estimates with the price of the property that was sold nearest to you. Depending on the estimate, and after taking into factor each of the points mentioned above the estimate is altered. For example, if the quality of the fittings and the fixtures used across the house is remarkable or they belong to a high brand, then the price will be added to the estimate. Or for example, if the wood used in the beams and columns is really old, then some points are going to be deducted from the overall valuation.
Many a times the properties are still under mortgage and a part of the payment is pending. This will definitely affect the final price of the property. It is always prudent to contact your bank and the real estate advisor to know whether you can sell the property and whether it will be a factor that brings down the valuation of the property significantly.