Property Appraisal - What's Your Property Worth?
Category Market Insight
Property appraisal is the process of determining the fair market value (FMV) of a property. This is done by analysing the current market and comparing it to similar properties in the same area.
The process starts with an inspection of the property. That means an experienced property professional visits the property, takes measurements, assesses its condition, and uses tools such as comparative market analysis (CMA).
Two Types of Real Estate Appraisal
- An appraisal for sale - this is done when a person wants to sell their property or when they want to know what their property is worth so they can borrow against it.
- An appraisal for purchase - this is done when someone wants to buy a property and needs to know how much they can afford to spend on it. Property appraisal for purchase is helpful when you're scouting for properties with renovation potential
What is CMA in Property Appraisal?
A Comparative Market Analysis (CMA) is a method of estimating the fair market value of a property by comparing it to similar properties that have recently been sold or are currently on the market. By surveying the residential real estate in the same suburb, street, or even building, property professionals can determine accurate pricing.
What Does Fair Market Value Actually Mean?
Fair market value is the price a good would sell for on the open market - where a willing buyer meets a willing seller. Simply put, FMV is what someone is willing to pay and what the other party is willing to accept. This is not to be confused with municipal valuations.
Additionally, the FMV of an apartment will include the cost to build or buy it, property taxes, and transfer duties because an informed buyer will always factor this into their calculations.
Property Appraisal Cape Town
Both abroad and locally, the best property appraisers use a hyper-local approach to valuation. That means, the best real estate valuation factors into account the macro-economic environment of the country, the dynamics of the city and suburb, as well as the unique market which evolves in specific apartment buildings. Cape Town property appraisal masters spend a vast amount of time researching and getting to know specific buildings to provide clients with accurate valuations.
Author: Paul Wasson
