28% of Americans say that investing in real estate is their priority. 

Are you considering purchasing a property, or have you recently purchased a property and want to ensure that you made the right decision? Or perhaps you’re selling your home and want to make sure you get the most out of it. In either case, you’ll need to have a good property valuation. 

Regular property valuations may not be something you’ve done before, but they’re important.

Read on to learn why property valuations are important and what impacts value. This enables you to make an informed decision as to whether a property valuation is right for you.

What Is Property Valuation?

A property valuation looks at many factors to come up with the real value of a property. It will consider things like the location of the property, its size, and its condition. 

However, it’s important to note that the amount listed in a property valuation isn’t what someone should pay for the property. Rather, it considers the property’s actual worth based on predetermined factors. 

Importance of Property Valuations

Valuing a property can be key to making informed decisions as a buyer. Likewise, it can help sellers better understand how to price their property.

The property valuation gives objective information about the details of the property, then identifies its believed value making it invaluable for anyone considering buying or selling real estate. 

What Are the Reasons to Get a Property Valuation?

A property valuation comes as a detailed report and provides a wealth of information about the property, and there are many key reasons to get one. This information includes:

• Rates
• Size of the land
• Building size
• Physical details
• Condition of the dwelling

Let’s take a closer look at why you might opt for a property valuation report on your property.

Understanding the Difference Between Price and Value

Of course, many people will seek a valuation for determining property valuation. Simply, they want to know what the property is worth. Unfortunately, this can be confusing for people buying real estate as there is a difference between the list price of a property and its actual value. 

A property valuation should consider the potential for growth over time, especially if the property is for investment purposes. Similarly, it must also consider depreciation and growth.

Guide to Buying and Selling

When people make other kinds of investments, they often seek the advice of seasoned professionals. Yet, people will not always do the same when it comes to real estate. 

Rather, they tend to follow the guidance of a realtor or trust their gut instinct. If you’re buying real estate for investment and to potentially grow your money’s value, you need as much accurate information as possible. 

A property valuation provides you with detailed, important information about a property when you’re ready to buy or sell.

Objective Assessment of Property Value

Whether you’re buying or selling, you need an objective assessment of the property value. And while a real estate agent is in the property business, they also represent the buyer or seller, and their wage is dependent on getting the highest value for a property.

A property valuation is done by an independent party making the information they place on value completely objective.

Independent Perspective on Value

People can get very emotional about properties. Unfortunately, this can cloud judgment.

When a property valuation is done, it offers an independent perspective on value. The assessor doesn’t have a personal connection to the property and can therefore give a more accurate picture of its true value.

Negotiations

A person selling a property can put any price on it. And once a property valuation is completed, it’s considered a legal document. This gives it significant power in property negotiations.

Avoid Surprises When Financing

Financing in today’s market can be full of hiccups. Buyers want to know they can lock in a rate and know that the property they’re hoping to buy can get financed for the amount they want. 

A property valuation helps to avoid any unpleasant surprises when handling financing and later when you insure the property.

Factors Impacting Property Valuation

When a property valuation is completed, many factors go into determining its value. It goes way beyond market value or even what someone is willing to pay for a property. A valuation expert will look at a host of factors. 

Typically, they start with the location of the property. Depending on the type of property, accessibility and developmental potential might be considered.  Neighborhoods and even other developments around the property may even be considered. 

The size of the land and the size of any building structures will be carefully measured and considered in the valuation. Age and the condition of any buildings will also be considered. 

In personal properties, the number of bedrooms and bathrooms impacted the valuation of personal properties. Nearby amenities and facilities can also impact property valuation.

Other property characteristics will also be a factor. These might include things like:

• Septic vs. sewer access
• Access to nearby water
• Condition of neighborhood roads

Calculating property valuation is a little bit of science and the art of calculation in coming up with a final number when there are so many factors to consider.

Guide to Property Valuation

Property valuations are key to making good decisions when investing in a property. They can help guide important decisions about whether real estate is a smart investment. 

Property valuations are also important when it comes time to insure a property. If you have questions about insuring a property you’re considering, we can help. Contact us to discuss all your insurance property needs.