When selling a house, property valuation is one of the most critical steps in the process. As a homeowner, you have likely put a lot of effort into buying and maintaining your property, and you hope to earn significant returns on your investment when you decide to sell. While many homeowners may initially look at the real estate industry’s growth and their property’s purchase price to estimate the selling price, it’s also essential to consider other factors.
The demand for properties in your area, the local real estate market conditions, and the current economic climate can also impact the value of your property. Additionally, any recent home improvements, such as renovations or upgrades, can increase the value of your property.
What is the market value of a property?
Market value refers to the price at which one can sell a house under normal circumstances. This does not include sales initiated due to unforeseen conditions like the death of a family member, relocation, or any other emergency where the seller needs to sell the property forcefully.
A real estate appraiser can assist in estimating the market value of a property. The calculation considers the location, market dynamics, size and condition, and other comparables. Calculators and tools on the internet also help with property valuation online.
How to calculate the market value of a property?
The value of land is increasing in India. The market value of properties in urban regions is particularly witnessing a surge. Nevertheless, in many areas, the land value remains unchanged.
Several factors affect a property’s valuation. One must study these factors thoroughly to arrive at the valuation of a house.
A significant factor in ascertaining house valuation is the location. If a house is situated in a posh area, its price is higher than those in the suburbs. Likewise, if it is in a commercial area, its value will be much higher than in a residential or less popular neighborhood.
When buying a house, most homeowners want it close to utilities, good schools, markets, restaurants, hospitals, etc. Moreover, if its location has robust connectivity to public transportation, office complexes, major highways, neighboring cities, and tourist destinations, it will carry a higher price tag.
Size and condition of the house
A property’s size, condition, age, and features impact its market value significantly. Generally, new houses with sophisticated renovations and updated features are appraised more. Moreover, the overall size of the house and the living space it offers are vital aspects to consider for property appraisals. A home with bigger bedrooms, bathrooms, living areas, lounge areas, gardens, and a terrace demands a higher selling price.
Similarly, upgrades and updates like the latest fittings, smart home lighting, and modern kitchen help increase a property’s market value. But homeowners must make these improvements as per market trends to generate positive returns on their investments.
Supply and demand in the market
Property prices are influenced by the demand and supply in a particular region. The demand is calculated based on the number of homes available for sale in a particular area, while the supply is calculated based on the number of buyers in that area. The demand and supply ratio also focuses on how soon a property sells in the area.
Even if the house one intends to sell is constructed in the best location and features state-of-the-art interiors, its value depends on the neighborhood’s demand and supply of properties. If the demand in one’s locality is high, but there isn’t adequate supply, the house valuation can increase.
Changes in the economy also reflect in the property market. For instance, if purchasing power reduces, people cannot afford homes. Therefore, one must study the economy and its latest trends to calculate the market value of a property.
Comparables entail the selling price of houses in a neighborhood with similar features and amenities as the house one intends to sell. A market analysis of the most recent sales helps one determine the market value of a property. With the expertise of a real estate appraiser, one can fetch data about nearby comparables and use it to price the home for sale.
When assessing the market value of a property, one must keep in mind that it is the market value of one particular house. The parameters to calculate property value in a gated society differ from that of a commercial property. Thus, one must begin by assessing the property’s location and the neighboring areas.
For instance, Piramal Realty offers luxury residences in Mumbai. The smartly designed modern and luxurious apartments comprise advanced amenities and offer beautiful views of the surroundings, be it the Arabian Sea or the Rani Baug. Such factors affect the property’s value and make it costlier than its counterparts in the suburbs or Thane.
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