home appraisal
Home Appraisal
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What is it and what is the function of a home appraisal?
The home appraisal, also known as a real estate appraisal, is the document that is needed to be able to give a value to a property so that the client can buy or sell that property. The value that is given is given according to the conditions in where the housing market is at the moment, this also takes into account the characteristics of the house such as: general condition in which the house is located, services that the house has, age, area, etc
Real estate appraisals are usually used for purposes other than just the purchase and sale of the home, they can be used for leases, to be used as mortgage collateral, legal claims, among others.
In Colombia, there are 3 commercial, cadastral and insurance appraisals, the value obtained from any of these 3 will help to be able to carry out the aforementioned (buy, rent or transfer to someone) with more security, since these prevent Large sums of money can be lost by not knowing the real price of a property.
What is taken into account when carrying out a home appraisal?
External aspects of the property are considered, such as the houses that are around it and that share some characteristics. In this case, a market study is carried out; What is also considered are different characteristics that the property has, such as:
- Land size
- Location
- Construction size
- Materials
- Services that the house has
- Conservation of the property
Steps to carry out a home appraisal
- Check that all the property documentation is in order, that there are no irregularities of any kind as this would delay the process.
- It is reviewed what type of property it is (whether it is a house, office or apartment) and what the purpose of the place is (what it will be used for, whether as a commercial place or for rent).
- The area in which the property is located is analyzed, all the services that are nearby are taken into account, and what roads pass nearby. As well as the type of surrounding buildings and houses.
- The appraiser will verify that the state of the house is in perfect condition, both inside and outside.
- With the information obtained from the previous processes, a study begins on the conditions in which the home is located and it is compared with the offers in the real estate market, in order to give a value to the home.
- After the appraisal is carried out, you cannot allow so much time to pass to make the purchase or sale, since market prices are always changing and it may happen that the value obtained with the appraisal loses validity.
Approaches to carry out a home appraisal
The approach to doing the appraisal is defined based on the objective, purpose of the appraisal, as well as the problem the client has. The 3 approaches taken to carry out the appraisal are:
Specific Costs: The value of the property is defined thinking as if it were new, then based on the characteristics of the house (area where it is located, m2, finishes, among others.) the depreciation of the property is calculated.
Market: The property is compared with those around it, analyzing the current state of the property, in order to give a value for the purchase and sale and that it is fair.
Income Valuation: The value of the income that can be applied within a period of one month and one year is calculated.
When is this appraisal necessary?
These are the situations in which a home appraisal is needed:
- When you want to buy or sell a property
- In order to obtain an insurance policy
- When property is passed from one owner to another, this is in order to do everything equitably.
- To obtain mortgage loans
Where to go to hire a real estate appraisal?
Here in Colombia it can be hired through an appraiser, this has to be certified by the Ministry of Environment and Sustainable Development so that the opinion given is official and valid for any procedure that is going to be carried out. The easiest way to contact an expert is through real estate companies or through the internet.
What is the price of an appraisal expert to perform this service?
The price is not exact, since each expert sets their own rate, although if the property has a commercial value of 100 million pesos the minimum price would be 300 thousand pesos. Although if the value is greater than the price, 1 per thousand is added, but if it is in the metropolitan areas, between 1.5 to 2 percent is added.
