Estimating the market value of a property is a unique method.
It is not easy to determine, because each building has its own particularities.
Both the property and the land must be considered in their own right.
A property valuation can be carried out to obtain a realistic estimate of the value of a property, which can be used to negotiate its sale.
To meet the objective of a property valuation, its market value is determined.
What is the market value of a property?
The market value of a property is the price that a seller can obtain for a sale or resale in a specific market in a given town or region.
Several factors are taken into account when estimating this value:
- location
- surface area or volume
- year of construction
- number of rooms
- the standard of furnishings
- condition and quality of the property, including interior fittings
You should also take account of certain restrictive provisions, such as building rights or rights of sale.
The market value is also a decisive factor when taking out a mortgage, as the mortgage only covers the market value estimated by the bank.
What are the three methods for determining the market value of a property?
Here are the three methods explained.
The hedonic method
You may also call this the “comparable values method”. This involves valuing a property by taking into account the actual transaction prices on the property market.
Statistical methods are used to divide the property into several components. In this way, we can determine an average purchase price paid for comparable properties.
Yield value
This is the sustainable, realisable rental value of a property. This value should be considered when estimating the value of investment properties.
LIntrinsic value
Here, the method consists of a precise assessment, by an expert, of the structure of a building on site. This method is used when the comparative data available using the hedonic method are insufficient.
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