There’s a lot to consider before selling your property. Some, however, are more important than others, such as knowing first the exact value of your property. A property’s value can be unpredictable, after all, and it pays to know the accurate value of your property before putting it on the market. Besides, with so many factors affecting a property’s value, you’d probably get wildly different estimates regarding your property’s worth.
That’s why it’s important to have a qualified valuer undertake a formal valuation on your property. They include all the various factors that affect a property’s value and adopt a systematic approach to give a thorough, equitable report on the valuation. A valuation can take around two to three business days, and if done by a professional valuer, be prepared—a professional can come at a cost.
You can go to a recommended site for a free online property value estimate. But, free or not, property valuation always includes various factors the affect your property’s value.
Factors That Affect A Property’s Value
Property valuation is the process of ascertaining the equitable market value of a real estate property. For a seller, knowing the actual value of your property can be a very useful piece of information to have—it can greatly influence your plans regarding your property. However, for an accurate and reliable valuation, the following factors should be considered:
- Property’s age and condition
- Size of the property (number of bedrooms and bathrooms included)
- Available storage space
- Potential for improvement
Using these factors, any real estate agent with enough experience can assess a property’s value. There are also external factors that can affect a property’s value and that’s why it’s better to use a property valuer who knows your area well. These external factors are the following:
- Facilities and amenities available in the area
- Standard and availability of schools in the area
- Number of homes in the area that are also in the market
- Number of buyers looking to purchase properties in the area
- Presence of transportation hubs and ease of commute
- Risk ratings, such as market and environmental risks
- Local zoning
- Comparable sales in the area recently completed
Reasons Why Property Valuation Before Selling Is Important
Being aware of your property’s worth is certainly a valid reason for a property valuation, whether you’re selling or not. But, if you want to sell, there are a number of other reasons why you should know your property’s value before putting it on the market. Some of these are the following:
1. Pinpoints Your Property’s Good And Bad Qualities
With a proper valuation, you’ll know what qualities to emphasize in your property. And, if there are weak points, you can do minor repairs. You may even find out that a few upgraded amenities could command a higher price on the market. In which case, you can do renovations that could significantly increase the value of your property.
For example, built-in cupboards and modern hardwood floors are premium features in a house, and they can certainly affect your property’s market value. On the other hand, toilets and bathrooms that haven’t been upgraded in decades will surely drag your property’s price down. And, if your house has an unfinished basement, you can turn this into an extra bedroom and add extra square feet, both of which can add value to your property.
A valuer can spot features like these and help you do adjustments to get the best value for your asset. Knowing the value can help you decide on what to do, whether your property is residential or commercial.
2. Know The Right Time To Sell
Real estate markets, like commodities in a stock market, can also fluctuate wildly over time. Your property’s worth may have been high at the time of your purchase, but current market prices might no longer reflect that.
Having your property undergo a valuation can give you an idea on whether to sell or wait for a more opportune time when market prices are more favourably. Postponing selling when the market for real estate is bad is a sound financial move. Selling at the right time can mean avoiding losing money on the sale of your property.
3. Determine Your Capital Gains Tax
Capital gains tax refers to the tax you have to pay on earnings from selling assets, like a real estate property. If you’re planning to sell your property, most likely, you’ll be paying a capital gains tax or CGT. Getting your property valued before putting it on the market means you’ll get an idea of how much you’ll be paying on your CGT.
And, there’s another good reason to have your property undergo a valuation before selling it—knowing how much you’ll be shelling out for your tax can help you budget whatever earnings you’ll realize from the sale of your property.
4. Get The Best Possible Price For Your Property
Finally, the most important reason why you should check your property’s value before putting it up for sale is to know how much you’ll be realistically getting from its sale. After all, you wouldn’t want to sell your property for what you think is a fair price, only to find out later that you could’ve gotten a much higher price for it. By having your property undergo a valuation before putting it on the market, you’ll have an idea of how much you can get from the sale.
Using the factors that affect a property’s value mentioned earlier, a valuer can give you a fair market value of your property, as well as its selling value. However, these values may sometimes not align with what you think is your property’s worth—they can be lower or higher than what you expect. For homes, especially, owners would usually put a higher value on them, as these properties have sentimental value.
That’s why it’s imperative to get a neutral, professional opinion on the property’s actual worth. Armed with this knowledge, you, as a seller, can make informed decisions regarding your asset.
Selling your property is a big decision, that’s why you need to know its actual value. A valuer uses various factors, both internal and external, to provide you with an accurate value of your asset. Knowing your property’s value can help you decide on what your next step should be, like doing repairs or renovations for added value, whether to hold off selling to get the most value for your property, and finding what your capital gains tax is going to be.