Property valuation, property assessment or real estate valuation is the scientific process of determining the worth, for a specific property. In most commercial and residential real estate transactions, appraisals are needed as they happen infrequently and each property is different, unlike stocks, that are sold and bought often and are alike. Appraisals help a seller determine the value of a specific property, to assist in the sale of the property, as well as determine the market value of the property.
There are several types of assessments that are performed, including general, legal and technical assessments of the specific property being assessed. General property appraisals are done by the county’s assessor and provide an overview of the condition and location of the property. A legal appraisal is given by a lawyer, who specializes in appraising property, or by a lawyer or appraiser whose services are paid by the seller or by the buyer.
A technical property appraisal, on the other hand, is made by the Department of Housing and Urban Development (HUD), a government agency. An individual can perform the technical appraisal on his/her own or seek assistance from a certified public accountant (CPA) or attorney. In general, a certified public accountant (CPA) is trained to appraise certain types of property, including residential, commercial and industrial properties.
Another process that determines the value of the property is the Multiple Listing Service (MLS) program. MLS is a system where property owners and agents are provided with information about real estate in the area that they are interested in. Once a property is listed, a real estate agent is responsible for the maintenance and management of the listing and can also help to make the sale possible. An MLS listing is considered as a free listing by MLS and, hence, provides the prospective buyer with enough information to guide him/her in making the right choice of property that suits their needs.
The final type of real estate valuation is a lease purchase. A lease purchase is a property that has been mortgaged by the seller. If the buyer decides to purchase the property, the seller agrees to reimburse the purchase price and then becomes the legal owner.
The real estate valuation process is not difficult to do at all and is often undertaken by professional professionals. The process is a lot easier if the seller is willing to do it on their own. However, there are some cases in which it may be a better option to hire a real estate professional, particularly if the seller is not that interested in doing it on their own.