A real estate appraisal also known as a property valuation surveyor or land valuer is the practice for evaluating the worth of the real property on ground, usually its market value, value-in-use, insurable value, investment value and liquidation value. These are to be done to know the right value of a property before decisions are made.
A real estate appraisal is highly important to investors. An appraisal is a third party that will come in and decide upon the worth of a property. He will oversee the interior and exterior of the property and other properties in the area and then will proceed to determine how much the property will worth. An appraisal is done for both the buyers and sellers because, while the buyer does not want to overpay for a property, the seller does not want to sell his property for less than its worth. It is highly advisable to buy or sell a property after it has been valued by an appraisal.
Property valuation is performed by an approved or qualified appraiser (also known as estate valuer or land valuer in most countries and in British English as a “valuation surveyor”).
The real estate appraisal is done using various methods such as: cost method, income method, and sales comparison method.
Cost method involves the estimated cost of improvements in the property, value of the land and deterioration factors.
Income method is used to value commercial and investment properties. This approach is generally considered the most applicable valuation technique for income-producing properties.
Sales comparison method compares the sale prices of similar properties that have been sold recently.
Doing a proper appraisal with various methods explained above will help you to know the right value of a property in order not to overpay for a property or sell property for less than it’s worth.