How are residential properties valued?
Category News
There are different values which can be given to a residential property.
The municipal valuation, is a general rough estimate, used by the municipality for the calculation of rates and taxes. Because this valuation is only changed once every few years, this value is not accurate.
There is also the insurance valuation. This value is based on the square meter size of the house and what it would cost, at current building costs, to rebuild the whole house if it burned down. This valuation is always very high and not indicative of the market value.
The market value is the value looked at when putting a house on the market. This value is attained using the comparitive method, whereby we compare what other houses have sold for in the immediate area. Note that we look at houses which have been SOLD, not houses currently on the market, which are often terribly over priced for the area.
Then, the general condition of the house needs to be studied. Has the home been well maintained or not? How big is the house? How old are the finishes in the kitchens and bathrooms? Does the house need a good paint? Are there carpets or tiles? How old are the tiles? Is there a swimming pool? Is the pool clean? Is there a double garage? Is the driveway paved? How is the security? Are there burglar bars, gates, alarms, perimeter walls, palisades, electric fencing, razor wire? How do the wooden rafters outside, under the roof look? Is the garden neat?
A good estate agent will not try to dictate the value of the house but will show the prospective seller, using a comparitive market analysis, what has recently been achieved in the immediate area. The banks will looks at these exact same sales figures as one of the criteria to finding value and giving a bond. Banks will not fully finance an over-priced property and the buyer will then need to pay in a very large deposit.
Using a good, local, area expert, estate agent, is key to selling your property at the best possible price, in the shortest time possible.
Author: Trevor Sturgess
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