When selling or buying a property, one of the most important things to look out for is the price. The price can be subjective, as each party believes it should reflect certain characteristics, depending on how they see a property from their own perspective. Normally, a seller sees their property as a sum of their investment, seeing it as worth directly proportional to their investment. At the other end of the spectrum, the buyer sees the downside of a property, looking for the price to fall in direct proportion to it. At the confluence of the two views there is an authority that dictates the correct price, and that is the property valuation.
When is it necessary to value an apartment (building)?
The valuation of an apartment or property is necessary when trying to find out its real value. Valuation basically estimates the value of the property, but the apartment valuation process is not biased towards either party. In short, a property valuation can be requested in the following situations:
- ● sale of real estate to an entity;
- ● purchase of real estate from an entity;
- ● appraisal of value of real estate for legal disputes;
- ● appraisal of value in order to obtain a bank loan.
It is therefore necessary to call an apartment appraiser especially if you are preparing to buy a property, this property valuation service will help you to pay the right price.
What is involved in valuing an apartment (building)?
The valuation of an apartment is a pricing process that looks at three ways of valuation. Each of these methods targets a specific segment, with the ultimate goal of fairness of the final report. Thus, the appraiser can choose one of these valuation methods, finally stating the price considered to be fair, in relation to one of the following elements: market, income and cost.
Appraisal from the income perspective
It is said that the market generally dictates costs, and this is not entirely untrue. When there are rapid changes in the market and prices cannot be calculated on a breakdown basis, the valuer can calculate the price by reference to current prices. This involves a comparison at the level of properties, taking into account that if a similar property sells for a certain amount, based on the principle of similarity and differences a price can be estimated for the property being valued. Thus, for example, if the cost of a two room apartment, Its price can be reported according to the other valuations of similar two-bedroom apartments that have been sold in the last period.
Appraisal from the income perspective
Income valuation is concerned with the idea of generating income from the use of a property. A property value may take a certain income, which they calculate on the basis that the property is already producing income, or they may take an estimated income, based on a forecasting model, based on what a particular property can produce.
Appraisal from the cost perspective
Valuation of buildings from a cost perspective involves analysing the depreciation of the building in relation to the purchase price when it was new.
How do you choose a real estate appraiser?
In some situations the assessor may be imposed, such as in court disputes, so that he is not influenced by the parties and is therefore impartial. If a property valuer is needed for the sale or purchase of a property, you will need to choose one with the following in mind.
- ● choose an ANEVAR-accredited home or apartment appraiser- ANEVAR is the acronym for the National Association of Appraisers in Romania, an organization that regulates and promotes appraiser standards. Accreditation is a recognition of an appraiser's skills, thus being classified as professionally recognized in this niche.
- ● choose an evaluator whose professional references and experience with other beneficiaries you can check.
- ● choose a cost-based appraiser - you can search for property valuation price references and do an analysis based on the budget you have set and allocated.
- ● choose an assessor with whom you can discuss transparently and effectively.
- ● choose a real estate appraiser who uses modern appraisal technology, so you can enjoy greater confidence in the quality of your data.
Documents required for the valuation of the building or apartment
The valuation of a property can be carried out on the basis of documents relating to the space to be valued, which contribute to a more complete report. It is the sole responsibility of the owner of the property to present the documents relating to the property, as he is the only person in a position to hold them and also to make them available to the valuer. The documents you need for the valuation of the property are:
- ● Title deeds - which attest the ownership and mention aspects related to the legal framework for acquiring the property;
- ● Registration of the property - or registration of the property in the public register of property rights;
- ● Cadastre - cadastre is the recording of the details of a particular property, taking into account its size, destination, particular aspects, description and associated charges;
- ● Information land register extract - the land register extract is a document issued by the land registry authority, which contains identifying details of the property, as well as items such as: property description, owner details, history of property transactions or ownership;
- ● Site and boundary plan - the site plan, as its name implies, is a graphic representation of the property in plan, with details of the dimensions of the building or land and other relevant details;
- ● Site plan - is a plan of how an area is to be laid out or developed, including the property to be valued.
What the valuation of the building or apartment consists of?
The valuation of an apartment or property is a process that is carried out as a continuum, with information accumulating as it is gathered from documents requested from the owners. Thus, the appraiser will consider checking the following data:
- ● Date of construction - the date on which the building is constructed, this is important in the context of the structural strength of the building (the building's structural system);
- ● Dimensions and function for which the building was designed - correct measurement of the surfaces to match the documentation, respect of the purpose of the building and the structure as designed;
- ● Interior and exterior finishes;
- ● Functional plumbing system - plus any improvements to it to improve comfort;
- ● Building equipment;
- ● Building adjacent structures - visibility and shelter, access to various institutions;
- ● Electrical and plumbing installations;
- ● Thermal insulation - to establish the energy efficiency class;
- ● Existence of smoke sensors - for protection;
- ● Type of heating and energy certificate;
- ● Humidity level in the dwelling;
- ● Degree of brightness - exposure to natural light, geographical location;
- ● Materials used in the furnishing - and their quality;
- ● Location of the property;
- ● Noise level;
- ● Degree of pollution in the area;
- ● Additional amenities;
- ● Existence of parking space;
- ● Location of the apartment;
- ● Floor.
Property valuation - Price
The price of the overall valuation of the property is dependent on the amount of work invested in its realisation. To calculate a property valuation price, data such as the number of rooms are taken into account, as there are significant differences in the calculation between a studio flat and a 3-room apartment, as well as other extra aspects in addition to the standard checks, such as improvements to the dwelling, which the valuer must check in order to estimate the cost of the property.
Guide prices
In general there is a 'common core' that can give some indication of the costs for each type of apartment, just so that beneficiaries can get an idea:
- ● a studio apartment in a block of flats can cost between 75 and 150 euros for a property valuation.
- ● a valuation for a studio or apartment in a block of flats can cost between 75 and 150 euros. From here, depending on the type of apartment, the cost of valuing a 4-room apartment can be calculated approximately with the simple rule of three;.
- ● valuation for a studio or apartment in a house or villa can cost between 100 and 250 euros.
How do you prepare the property for valuation?
The preparation of a property for valuation should in the first instance take into account the preparation of specific documentation. The title deed, the building's energy certificate and all other documents relating to the property should form part of a special file for the valuer. You can also prepare yourself with a file containing a list of improvements, in order to be able to increase, where appropriate, the value of the property. If you think the property could be improved in appearance before the valuation, you can try to remedy certain aspects such as: applying a washable paint, professionally cleaning the floors, replacing the joinery, etc. Do not provisionally cover up hidden defects in the property, as these may become apparent when the property is sold, and the buyer will be able to withdraw from the deal by contract.
How long does a property valuation take?
Property valuation is dependent on a multitude of factors, the most important of which are: the availability of the valuer, the type and size of the property or the complexity of the details surrounding a particular property. It is very important to ask this detail before the actual valuation, to get an idea of the waiting time and how long a property valuation takes.
How long does it take to draw up a property/apartment valuation report?
Following the valuation of the property, a property valuation report is drawn up. The preparation of the report is also a procedure that is time-dependent on the data investigated by the appraiser, so we can say that the preparation is done according to the size of the property, the complexity of the data and, of course, the time available to the appraiser.
These are the details you should know about the process of valuing a property, regardless of where the report will be used. Every improvement, but also the features that the home has in relation to its location, every size, all of these are very important elements in the valuation, so you need to get these right in order to receive a valuation that reflects the true price of the property.
