How to calculate the value of your home
You think finding a property that has lowered it’s price by $50,000 when you buy it makes this building a great deal? Nothing is less sure. Indeed, you may have still paid too much. Here are some of my tips for calculating the market value of a building.
Calculate market value
I’m sorry to burst your bubble, but often people buy without proper market analysis, and then end up paying a lot too much for what it’s worth. In these circumstances, how do you calculate the true value of a building? It is not enough to say “I paid less than the municipal evaluation price” to think I realized a bargain, because it is easy to find undervalued and overvalued buildings in the same city. For example, I bought a revenue building a few years ago and I paid 25% less than the municipal assessment price, and that was the real value of the building. building. The opposite is equally true.
One can compare the property with others sold in the same area. I insist on the word “sold” and not “for sale”, because it is those that have been the best indicator of the good selling price.
The replacement cost technique of calculating property value can be done by adding the cost of land value, the depreciated replacement cost of the building, and the depreciated replacement cost of land improvements. Due to its complexity, this calculation can only be performed by an accredited appraiser.
In the case of rental properties with more than 4 dwellings, the income technique can be used, which uses the net income from the building in question to calculate its market value.
Figuring out how to find the value of your home can be made easier by using the services of a chartered appraiser. For about $ 400 to $ 600, it can give you an accurate estimate of the market value of your property.
Hire a real estate broker to benchmark the price of houses sold in your area. When it comes to you with a price, be sure to ask questions about how it came to this calculation.
Ask for a written report of the evaluation. You can get different valuation verdicts with real estate brokers because valuation is not an exact science. To choose the broker who evaluates your land at the highest price is not really advised.
Ask at least 3 different opinions in order to have a more precise idea and do not hesitate to discuss frankly your project with the brokers solicited by mentioning that you wish to have the right time.