No homebuyer wants to get ripped off. Before you make an offer, it’s imperative to ensure that you’re getting a fair deal. Whether you’re a first-time homebuyer, a current homeowner who wants to move, or a real estate enthusiast diving into apartment investing, you need to learn ways to assess the price of any property on the market to make a safe investment.
There is no single strategy for figuring a property’s value, and there are many factors to think about that can affect the value of the property you’re planning to invest in.
What Is a Property Valuation?
Property valuation is the assessment of a property’s value based on different factors, such as location, characteristics, and neighborhood.
The location of a property is one of the significant factors in determining how much a property is worth. A good location depends on the climate, safety, and development. Even when you have two identical homes above identical lots, one can have a better location than the other, making it worth more compared to the other one.
Along with the location is the neighborhood, such as how easy it is to access public transportation from there. Are there nearby schools, hospitals, parks, grocery stores, restaurants, or attractions? Properties vary depending on an area with different amounts of amenities. Crime rates can also define a property’s value.
However, having a grocery store nearby also depends on whether that particular place has high-quality products or whether they’re properly and regularly stocked. It also depends on its popularity.
The value of a property or home depends on its internal and external characteristics. Internal features include square footage, the number of rooms, materials the house is made of, interior design, aesthetics. Does it come with build-in storage or featured appliances? External characteristics are the ones appearing outdoors, such as the size, landscaping, or whether it’s low or high maintenance.
How to Determine a Property’s Value
Knowing the factors isn’t enough, but a homebuyer must also learn the different ways to determine a property’s value based on those factors.
Research on comparables on the market
As a homebuyer, you should educate yourselves about recent comparable sales in your local areas around the property you’re about to invest in. These comparables can have similar and different characteristics. Working with real estate agents is always a good idea since they can easily find out information about houses around the neighborhood. You can find information online, but talking to an agent can provide more insights and advice. As a result, you will make fewer mistakes.
Gaining information about recent property sales can help you have an idea of a reasonable offer on the property you want to buy. You can visit other homes and get a sense of it differs from the one you’re buying. Compare the prices while you’re at it. This will let you know what price range seems fair to offer that the seller would likely accept.
Check out vacant properties
The more you know, the better. It’s not only the sold ones you need to know about. To help you further decide on a price offer, figure out why other properties aren’t sold as fast as the others. You can also compare prices, considering that the unsold houses can have the same asking price as the one you have your eyes on. This can make you think that the one you’re buying may be overpriced. You should know that prices should be lower if many similar properties are on the market, especially if these homes are still unsold.
Verify how long the property is on the market
The time frame a home stays unsold can be a significant factor in the property’s value. It’s also important to know why. Homes that have remained vacant for at least six months or more can be defined as overpriced. So the property or home that you have your eye on may be overpriced as well.
Economic fluctuations and seasonal reasons can also be valid indicators of alteration in the given time a property would stay on the market. Negotiation can be an altering aspect as well. A property that can’t be sold with its given price would need a reduction, especially because they’re in the market for too long.
Being curious about everything with regard to buying a property is just right since it’s a huge investment to spend. Whether you’re buying or investing in an apartment, a house, or land, you need to know as many details as possible. Again, the more you know, the better.
