In the real estate world, the value of your home is everything. Understanding the intricacies of how your property is valued can help you increase the value of your house when you look to sell.
In this blog, we will discuss what a property valuation is, the difference between market valuation and property valuation, the factors that affect property valuation, and how you can improve your property’s valuation. If you want to learn more about the property market, this blog is perfect for you.
What is a property valuation?
Property valuation, in its essence, is the process of determining the monetary value of a property. It involves a thorough assessment of a property’s characteristics, location, and current real estate market conditions to arrive at an estimated value. Property valuations are crucial for various purposes, such as buying, selling, financing, insuring, and taxing properties.
Property valuation and market valuation – What’s the difference?
Property and market valuations are often used interchangeably, although they mean completely different things. Here are the differences between property valuations and market valuations:
Property valuation focuses on the value of a single property. The valuation considers the property’s unique features, conditions, and location. Property valuations aim to determine the fair value of the property based on various appraisal methods.
Market valuation assesses the broader real estate market in an area. This method accounts for trends, supply and demand, and the overall economic climate of the market. Market valuation determines the general value of properties in a specific area.
What factors affect property valuations?
Property valuations are influenced by a multitude of factors, some of which are more prominent than others. Understanding these factors can vastly improve your property’s valuation.
Location is easily one of the most important factors for property valuations. A property that is close to amenities, schools, transportation, or just has overall neighbourhood desirability will more likely have a higher valuation.
2. Property condition
By no surprise, a property that is well-maintained with modern amenities generally commands a higher valuation than those in disrepair.
3. Market conditions
Property markets can fluctuate over time. Sometimes the market may favour sellers when prices tend to be higher. Markets can also trend in the other direction and favour buyers when prices fall.
4. Comparable sales
Comparative market analysis (CMA) involves looking at recently sold properties in your area that are like yours in terms of size, location, and features. These comparable sales can help determine your property’s value.
5. Economic factors
Various economic factors such as interest rates and inflation can influence the valuation of a property. A strong economy typically leads to higher property prices. The opposite is also true, a weak economy generally leads to lower property prices.
How can you get a better valuation?
Are you looking to boost the value of your property? Here are 4 ways you can increase the value of your home before you sell:
1. Home renovations
Investing in home renovations can add significant value to your property. Upgrading significant areas such as the kitchen or bathrooms can vastly improve the look of a home. A home that presents well will likely result in a higher valuation.
2. Curb appeal
First impressions matter. Improving your home’s curb appeal by landscaping, painting, and maintaining the exterior of your home can increase the value of your property.
3. Add technology to your home
Adding smart home technology like lighting, security, and air conditioning can be appealing to new homeowners. Upgrading the tech in your home can improve energy efficiency and sustainability which is important to some buyers.
4. Market timing
If you are looking to sell your property for the highest value, consider the market timing. Selling your home during a seller’s market can result in a higher valuation and a quicker sale.
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