Knowledge and information are vital when making real estate and property-related decisions, as many factors can determine the desirability and investment potential of a property. These boil down to considerations such as location, property type, and potential for development or passive income, among other things.
Once a property has satisfied some, if not all, of the boxes on a homeowner or investor’s list and discussions have moved on to the next stage, it is important to understand how to determine how the price compares to the market value of the property in question.
Real estate valuation and fair market value can be confusing to the everyday consumer. Here is a brief guide to help you make well-informed decisions.
Market Value vs. Fair Market Value
Market Value is the current worth or presented price of a property as a tangible asset. This is based on calculations and estimations of the current state of the market, its location, age, current state or condition, as well as local market trends and economic conditions.
Fair Market Value is wholly similar to this, but with the following conditions:
- Both the buyer and seller are well-informed
- The transaction is voluntary, with neither party pressured to buy or sell
- Both parties have ample time to complete the transaction
Put simply, Fair Market Value is the agreed on purchasing price of a given property that both the buyer and seller can agree on, without pressure, after considering all available information and prospects.
Professional Valuation and Appraisal Services
Defining a property’s market and fair market value is one thing, but calculating and determining it is another. Even the most pragmatic individuals can find this process challenging due to the complexities of real estate, zoning, and taxation. Therefore, it’s best to leave valuation and appraisal to seasoned professionals.
At Santos Knight Frank, our valuation department consists of licensed professionals who specialize in determining the value of a property, whether it be a studio-type condominium unit or a luxury home with developable land.
Our team meticulously inspects each property, evaluates zonal values, looks into tax laws, and provides estimates based on these factors, current market health, and projections. If required, our team also conducts comparable sales appraisals by looking into recently sold similar properties.
The Advantages of Staying Informed
Whether buying or selling a property, employing the valuation services of a qualified appraiser is invaluable when it comes to acquiring a fair and accurate estimation of a given property’s value. With the appraiser handling the computational legwork, one can rest assured and have peace of mind knowing that they will not overlook anything, keep everything in order, and leave only well-informed decisions to be made.
As the real estate market continues to grow and evolve, keeping well-informed of a property’s value is paramount in determining when to buy and when to sell. A comprehensive appraisal can help with just that.
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