All you need to know about real estate valuation

Published on : 02 May 20192 min reading time

You are the owner of a real estate property and you are about to sell it, so estimating its value is essential before selling it. This task must be entrusted to a professional who is the only one able to do it in the state of the art. In what follows, you will learn more about real estate valuation, its purpose and how it is achieved.

What is real estate valuation?

It is a question of estimating the value then the price of a property at the time of its sale based on a set of criteria. These include the condition of the property, its age, its surface…

In which cases is a real estate estimate made?

If real estate is subject to real estate transactions involving a purchase or sale, or if term loans with collateral are contracted to finance the purchase of a property, a real estate estimate is made. In the case of auctions, liquidation sales, mergers and acquisitions, the value of real estate in the assets of the corporation is determined. In addition, the properties mentioned in the leasing transactions are subject to estimation activities. Similarly, in many cases, a real estate estimate is needed. At this stage, it is extremely important that the estimation procedures are performed correctly, impartially and objectively and that reliable reports are produced.

How to estimate a property?

The real estate appraisal is carried out independently and impartially by using specific standards. Real estate professionals can use three different methods. These methods are: the cost approach, the previous comparison approach, the income reduction approach.

In transactions carried out using one of these three methods, the professionals in charge of real estate appraisal report by analyzing the current conditions of the real estate market. It is at the end of this report that we can estimate the value of a property.

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