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To uncover the true hidden value of your realty, or determine the problems with your property, it is important that you get your fair valuation of your land done by real estate appraisal. Real estate appraisal is also known as land or property valuation, whereby a certified real estate appraiser can determine the market value of your realty through opinion.

What is Price and what is Market Value?

The market value of the property is the amount of money people are ready to pay for the property. It is determined by the people or the market based on factors such as location of the realty, value of the land etc. Price of the property is irrespective of its market value. Although, generally close to the market value, it differs from it in that the buyer and seller of the land could negotiate a deal quite different from the market value of the land as well. For example, a buyer would be ready to pay a higher price if he feels that the land is worth much more.

Need for Real Estate Appraisal

Value of realty is a dynamic prospect and has to take into consideration a number of factors. This heterogeneous nature of property valuations is due to the fact that no two properties are the same and therefore their values differ significantly. Real estate appraisal is therefore required to determine the fair value of the land.

Methods used to determine value

There are three general methods utilized to determine value of a piece of land:

1. The income capitalization approach: This method of valuation is performed during real estate appraisal for commercial properties which are an investment. It takes into account the income stream into the market value or present value of the property.

2. The sales comparison approach: when there are many similar properties available in the market, the real estate appraisal can be done via the method of comparing the prices of these similar properties. The sales comparison approach does exactly this to determine what the value of the realty should be.

3. The cost approach: The oldest and widest used method of determining value of the realty is the cost approach. It is also known as the summation approach as it sums up the value of the land and deducts the depreciated value of any improvements. This method works great for new constructions, however with older constructions; the valuations are often not as accurate.

Getting a real estate appraisal for your property is a good start to the procedure of buying or selling the land desired. Real estate appraisers who have been certified and approved are available to provide fair valuations for your land so that you can offer the market value to the person who would buy your land. Real estate appraisal has therefore become a necessity prior to purchasing or selling land to anyone, along with obviously real estate agents.

If you plan on uncovering the real hidden value of your property, or determine the problems with your property, it is important that you get your fair valuation of your land done by real estate appraisal.