Property valuation, land valuation or real estate valuation is a process of determining the value of real estate. Real estate transactions frequently involve appraisals as they happen infrequently and each property is different, unlike shares, which are traded frequently and are basically similar. The process of valuing properties can be quite complicated and tedious, especially if the value is not directly related to the purchase price but instead to the sales prices at which they were sold. Valuing a piece of real estate involves identifying the worth of the property based on the data that has been provided by previous owners, comparing that data with current information and making comparisons among similar properties to determine the value of the property as it stands.
A number of firms provide services for valuing real estate, and the process includes the use of computers as well as the services of qualified appraisers. Computerized databases are created in order to provide detailed information about each property, including: year of development; its location; its physical condition; its condition at the time of transfer, if there was any damage to the property during the transfer; whether there are any liens or encumbrances; and the condition and extent of any improvements to the property, including any additions or repairs. The database is used by qualified appraisers and real estate professionals. When the property being evaluated is a piece of real estate, the database can also include information on the names of all owners of the property in question as well as information on all previous owners of the property and their addresses.
An appraisal is required when the value of the property is less than what the current owner is willing to sell it for. In this case, the appraiser will require the seller to pay a certain amount of down payment as well as closing costs. A portion of this amount must then be retained by the seller as closing cost. An appraisal is also required when the value of the property is greater than what the current owner is willing to buy it for. If the market value is less than the current owner is willing to pay for it, the seller may require the buyer to pay more money than he or she is actually willing to pay to get the property.
Due to the fact that many people in today’s market are buying property that is undervalued, many real estate values have not risen since the last assessment. However, values are likely to increase as the market improves. There are other factors that can affect real estate values, including; population increase, inflation, interest rates and other economic factors. In most cases, real estate values do not rise substantially throughout the year, though real estate values do tend to increase in some areas over the course of a few years.
If the appraiser determines that the value of the property exceeds the net sale price, the owner is entitled to receive either a cash payment or a property tax credit. If the value is less than what is owed on the mortgage, the seller may have to pay the difference between what the seller owes on the loan and what the buyer owes on the mortgage.
In most cases, a real estate appraisal is necessary for the tax credit, but this is determined by a process that requires the assistance of qualified appraisers who must review several aspects of the property. While there may be many factors that influence the outcome of the property valuation process, the information that is required for an appraisal may be as simple as a photograph or a video of the property or a description of the property that can be recorded on a computer or other type of recording device.