If you have a real estate property and want to sell it, then the first thing you do is to access the value of the property. Valuation of your property is never a cakewalk. You have to consider several factors to find the accurate value of the property. One of the best ways to access the value of your property is to do the comparative market analysis of those real estate agents to determine the value of a property. Of course, this is different from the appraisal. But it will help you to find out the highest value of the property. Here, we will discuss the factors that affect the valuation of your property.
What is Comparative Market Analysis (CMA) Approach?
When you will use this approach, you have to consider several factors. You have to be aware of the behaviour of the target market and how the market is behaving at a particular moment. This approach compares the value of the property with several relevant factors. It will identify the cash price of the property. The factors that are important include- utility, demand, transferability, scarcity, and also include depreciation as well.
To apply this approach, you have to find an ideal property that is similar to yours. If you find 2 or 3 properties, then it can provide you with more accurate information. When you identify the three properties, you have to gather more information such as the mode of financing used and the length of time remaining in the market. Then, you have to find the sale price and date of its sale. Then, you have to find out its size, location, number of rooms and bathrooms, age of the home, and other facilities.
Factors affecting the valuation of your property:
Location is the key to the valuation of the property. Buildings, homes, and plots located in commercial centers and market areas carry high prices than the residential areas. Then, some plots are located in well-developed and registered colonies would value higher. The valuation will be higher in freehold land than those on leasehold plots.
The valuation of the properties with better infrastructural capabilities and modern amenities will have a higher price than those of the properties that fail to provide better electrification, telephone, sewerage, and other infrastructure facilities. The facilities like community centers, gyms, children’s parks, parking lots, and general stores.
Infrastructure developments are one of the important factors that influence property cost. The infrastructure development includes communication facilities like roads, airports, malls, flyovers, hospitals, marketplaces, and other things.
Affordability is always an important factor and cost incurred in holding on to the property. That includes interest rates, property costs, and wages.
The valuation of property is also related to the type of materials used, design, layout, durability, and life cycle of the building.
6) Availability of land:
There are places where the availability of land is huge for residential purposes. In those areas, the cost of the property will be comparatively lower than the places where the availability of the land is scarce.
7) Demand and Supply:
Demand for real estate properties is inversely proportional to the supply. As the supply of real estate property decreases, the valuation of the property will increase.
The cost of real estate property goes up if the builder can customize the residential space according to the purchaser’s needs. For example, the purchaser wants to have landscaped terraces or verandahs connected to the flat or stylish kitchens.