As an owner, regardless of whether or not you want to sell your home, you should always be aware of the commercial value of a property. In fact, if you’re thinking of selling, you’re more interested in this information. In recent years, we have seen many owners who care to determine the commercial value of their property.
There are many methods we should avoid in determining the market value of a house, as deaths. However, there are very good methods that help us fix the value of a property.
What is the market value in the world of real estate?
One of the most common misconceptions in real estate corresponding to the different types of real estate value. There are many types of “values” of real estate. 3 of the most common are the commercial value, the estimated value and the assessed value. These types of value are often confused as if you were the same, which is a big mistake because they are completely different things.
What are the worst ways to determine the market value of a property?
Method price per square meter
There are many owners and professionals in the real estate world who believe that the price per square meter is a good way to determine the value of a property. Do you think this is simply take the price of a house similar to yours, divide it by the number of square meters and … ready, we have the price of truth home? You’re wrong! Using the method of price per square meter can be used as an indicator to understand the overall value of an area, but should never be used to determine the market value of a property.
The method normally price per square meter is used by real estate agents who are unfamiliar with the place or are not working to give a price to a property. The reason why this method is ineffective to determine the market value of a property is because each house is different and unique. While the properties are similar with regard to size, number of rooms or bathrooms numbers, there are many factors that are not taken into consideration when applying the method of price per square meter.
Pricing commercial price online
There are many owners who believe everything they read on the Internet. If real estate agents receive a dollar every time a homeowner says, “But I saw that it was better internet” they have much money to go on vacation. One of the worst methods to determine the market value of a property is to ask for an appraisal online.
There are many websites that offer estimated values. Just think, how can a website that does not live near you determine the market value of your property? It is impossible to know because these pages have no idea what is happening around your house or in what state is your home.
Automatic valuation model
Automatic valuation model, is a service that provides real estate valuations using a mathematical model combined with a database. The automatic evaluation is done in seconds and uses public information along with a computational logic to calculate the estimated value of a property.
It seems that the AMV was a great way to determine the market value of a property because it uses statistics and a lot of information but it is actually quite the opposite. This is a terrible method to determine the market value of a property. Just as the model price per square meter, does not consider the characteristics of the property, or improvements or amenities.
Another obstacle of using the AMV to determine the market value of a property is that information is not always updated. If this information is not updated for months and not according to reality, a lot can change.
Comparative Market Analysis
One of the best ways to determine the value of a property is making a comparative analysis at home. A comparative market analysis, usually known as CMA, is a detailed analysis by a real estate professional that evaluates the home sold (and comparable) in the last 6-12 months of a particular place.
You must ensure that the agent is experienced to have a complete and accurate CMA. Once you have it, there is a list of aspects evaluated for CMA.
- Comparison of properties with similar measures
- Comparison of properties in the same area
- Comparison of properties with the same number of rooms and bathrooms
- Comparison of properties with similar improvements
Property evaluation report
Another method used to determine the market value of a property is to buy an evaluation report. An evaluation report is a written assessment of the property. The cost of this report varies between $ 250 and $ 500 but is a great way to have an objective opinion of the market value of the property.
For you will see, there are many ways to determine the market value of a property. Some methods are ineffective, but there are other good methods. If you are interested in knowing the market value of your property is very important not to fall into the ineffective methods.