Before you buy or sell, valuing the property accurately is very important. Whether it is to sellers, buyers, lenders or the real estate investors. Before you go and look for the Residential Valuation in Adelaide, here are some of the key principles of this process that you must know in beforehand.
Let’s get to know about them.
The value of dust
Whether it is about the residential valuer or the real estate valuer of South Australia, the process is all about determining the economic value of any property. Normally, this process seeks to determine fair market value. This is a price on which a knowledgeable seller will sell his property willingly and the knowledgeable buyer will also purchase the property at his own wish.
In short, it can be said that both of the parties be aware of the relevant information and none of them will be forced to buy or to sell the property. Fair market value is not always the same as the sales price. For instance, a short sale of any real estate will not bring a fair market value. Well, sometimes, it can bring up a fair market value, but the consequences are not always as expected.
It is because the seller is distressed and must sell the property right away without delay. In such situations, potential buyers will know that thing and they have a bargaining advantage. For that reason, they will get the property for less than the exact market value.
Property principles
Property principles are commonly used as it helps to determine the exact property value. The conformity rules state that the real estate that uses and style conforms related properties that are located on the immediate area has a higher value than the properties that do not.
The principle of change recognizes that the various forces normally act upon and change the real estate market along with the property values. For instance, pollution that spills into a residential neighbourhood is like an environmental change that can easily lower the value of that property.
The substitution principle is simply the ability of one piece of real estate to be an acceptable substitution of another. The principle of the highest and best use states that the property will receive the best price while it is being used in such a way that helps to produce the highest economic value.
However, the principle of supply and demand states that if the supply of real estate exceeds demand, then the prices will go down. But, the time, demand exceeds supply, prices will go up. A single family home that is located in an industrial area is not the highest and best use for the real estate agencies as the owner can easily get a better return by using the property for some commercial use.
Most of the people do not want to buy houses in the middle of the industrial park and those properties are better for commercial use.