What is property value?

Property value refers to the worth of a piece of real estate based on the price that a buyer and seller agree upon. According to economic theory, the value of a property converges at the point where the forces of supply meet the forces of demand. In other words, the value of a property at any given time is determined by what the market will bear.

Property value example

The value of your property matters in terms of how much you will be able to sell it for, but there are other issues to consider. Property value impacts:

  • Your ability to refinance your mortgage or take out a line-of-credit, using your property as collateral.
  • Property taxes, pushing them higher or lower.
  • The overall value of your neighborhood.

Economic Factors Affecting Property Value

If the house down the street sold for a price that is higher than your CMA suggests, take a look at the mortgage market. Have interest rates risen since that sale, slowing down sales? . Is employment looking bright for the immediate future and are new companies moving in? Then property values will increase. Staying abreast of the economic indicators for your area helps explain your property’s changing value.

Other Valuations, Other Purposes

A lender’s appraisal carries weight when establishing a property’s value. If the appraisal comes in below what a buyer is willing to pay, negotiations as to who makes up the difference can send a deal down the tubes. Lender appraisals delve deeper into the analysis of the property than a CMA, and the more recent the sale the more weight that sale price carries when arriving at a value.

A property assessor’s appraisal is done to establish a tax base for the property and should not be used to establish a property’s value. Most assessors’ appraisals contain deductions for homesteading, tax benefits pertaining to the community, age benefits and other factors that lower the evaluation.

Are you thinking of purchasing or selling a property? feel free to contact Limult Group on +2347052446249 or visit our store at www.limult.com/shop to see more products that we make available