Property Valuation and Property Price
Purchasing of property is the most important investment which people make in their life time. The economic forces of demand and supply are the major factor in deciding the price of any product and the real estate is no exception. The Value of the property is the function of demand and supply and if the demand for the house increase faster than the supply, then the prices go up and vice versa. A few of the factor that affect the value of the property is listed below:
- Infrastructural Development – Infrastructure is the major consideration for home seekers. Locations having good infrastructure have a higher value. Facilities like accessible roads, railways and other means of public transport have been seen to have a higher price. Proximity of Social infrastructure such as schools, hospitals, super markets, retail stores, shopping establishments, parks hospitals are priced higher.
- Location – The location of the property is the most obvious factor when it comes to valuing a property. The location is not just a geographical location, also the closeness to key amenities and facilities. The location includes the quality of the area of the city or town and properties in prime location get a higher price. Properties located in rural areas cost less.
- Geographical Stability – By Geographical Stability we mean the areas that are prone to the effects of the natural phenomena. If natural showers or rains cause water to be stagnant in the area, then these areas are not preferred. Similarly areas prone to natural phenomena like flooding, tsunamis, water scarcity are not preferred.
- Age and Condition – The Land on which your house or apartment is built usually increases over a period of time but the structure is depreciated as the years pass by. Properties that are well kept and maintained well are preferred than properties that need renovation or works to be done. The buyer will also take into account the costs involved for renovation.
- Size and Design – Houses that are well designed with optimum use of the space and natural sunlight and ventilation increases value of your property.
- View – Any buyer will check on the view from the windows / balcony and will prefer an unblocked good view than a blocked one. Property with blocked view will have a lower value than a property with a good unblocked view.
- Surrounding Area – What is located around your neighbourhood will have a great impact on the price of your house. This also includes the plans for the neighbouring areas situated like an upcoming project or new infrastructural development coming up in the near future.
Property Valuation is the estimate of the current market value of your property based on the factors mentioned above and other economic factors, etc. Property Price is the price that is executed between the buyer and the seller and this price is either below or above the market value. The motive of the buyer is to buy the property at the lowest possible price and the motive of the seller is to sell it at the highest possible price.
If the seller is in need of urgent money, the buyer can use it to his advantage. Similarly if the property is appealing to the buyer and is his dream home, he will be willing to pay a higher price, the seller can use it to his advantage. The emotional and personal needs of the buyer and the seller also play a very important part in the price of the property and the one who wins is …………….