REAL ESTATE VALUATION: WHAT YOU KNOW ABOUT REAL ESTATE VALUATION

ESV ANYANWU IJEOMA C.

VALUE PROPERTY:

Estimating the value of real estate is necessary for a  variety of endevours, including financing, sales, listing investment analysis property insurance, and taxation. But for most people determining the asking or purchase price of a piece of real property is the most useful application of real estate valuation, particularly as it pertains to sales.

Valuing real estate is difficult since each property has unique features such as location, plot size, floor plan, and amenities.

Generally real estate market concept like supply and demand in a given region will certainly play into a particular property’s over –all value.

BASIC VALUATION CONCEPT

A property’s value is defined as the present worth of feature benefits arising from the ownership of the property.

Therefore, an estimate of a property’s value must take into consideration economic and social trends, as well as governmental controls or regulations and environmental condition that may influence the four elements of value.

i. Demand:  The desire or need for ownership supported by the financial means to satisfy the desire.

ii. Utility: The ability to satisfy future owners and needs.

iii. Scarcity: The finite supply of competing properties.

iv. Transferability: The case with which ownership right are transferred.