Real property valuation, property appraisal or land valuation is simply the process of determining the value of real property. Real estate deals often necessitate appraisals as they occur infrequently, but each property is different, and unlike corporate shares, which are usually traded everyday and are identical, real estate properties are bought and sold infrequently. When a real estate deal is finalized, the final valuation is recorded and filed with the county clerk. The valuation process helps a seller evaluate and qualify a property to sell to a prospective buyer.
The process begins by evaluating the location of the real estate property. Then it analyzes various elements to determine the overall value and to determine the actual selling price, including:
The type of property is important in determining the value of that particular piece of property. When buying a piece of land, it is important to know what kind of land is being purchased. For example, the value of a piece of land that includes a lake or a stream may be very different than the value of a piece of land that does not have any natural features. There are many different types of property that can be assessed. Some examples include land, buildings, structures, improvements to the property, utilities, and other features. These different elements are usually measured in a certain amount.
Once the type of property is determined, it is important to note the specific value of the property in relation to the surrounding properties, to determine its fair market value. If a house was built in 1900 and has not had any repairs made to it since, its value would be much different from a home that is in need of repairs and is still new. One property’s fair market value is another property’s fair market value.
The value of the land will be compared to other properties for comparison purposes and to determine if it is within the fair market value of the property that is being bought. The land that is included in the assessment is usually assessed using the same methods used in purchasing other real estate properties. A land surveyor will examine the land to be appraised. He will take measurements of the land to determine the exact property boundaries and determine how much of the land will be included in the total property assessment. The surveyor also takes into consideration the amount of space available on the land for future growth.
It is important to have accurate land surveying done when purchasing real property. The value of the land can vary greatly and if the land is purchased at the wrong area, the difference between the value of the land and the surrounding properties could be substantial. Having accurate land surveying done can help a seller to determine whether the land is within the fair market value of the property for sale.