Estimating the value of a piece of real estate can be a very sensitive subject, especially if one is actively looking for a buyer on the market. In many cases, the amounts the buyer and the seller have in mind can differ substantially, so having an estimate made by an independent expert can help a lot in finalizing the deal.
However, in addition to selling, a correct estimate of a real estate’s worth can be incredibly important if the owner is thinking of renting it, insuring it, taking up a loan or even when it comes to the matter of divorce. Having an expert’s opinion can be crucial in ending a litigation process.
This is why in this article we will take a closer look at the issue of assessing a real estate’s value.
You can easily get an estimate from any source if you’re just looking for information on the approximate value of your real estate and the price it could achieve.
But if the piece of real estate is subject to litigation, the only relevant estimate will be the one made by an expert appointed by the court. This is defined in the Real Estate Valuation Act. In case you find yourself in such a process, keep in mind that court experts usually give conservative estimates, i.e. a number slightly smaller than what the piece of real estate could realistically achieve on the market.
A more precise estimate can be acquired from authorized agents, such as the ones from the Terra Dalmatica agency because these people closely monitor the market and have a much better idea of what buyers could offer. They will be able to assess which elements affect the final price most, and in some cases, their opinion can be relevant in court.
The value of a piece of real estate can be affected by a variety of factors, but in most cases, the location will have the biggest impact. It’s certainly not the same if you’re buying a property in Dubrovnik’s Old Town or in a small village in Lika, and the prices will also vary from neighbourhood to neighbourhood in a bigger city. So, apart from the wider location, one has to consider the more immediate surroundings, as well as the micro-location.
Social relationships the seller has with their neighbour also have a role to play because if they are bad, the interest for the property can drop. It is also important to have clear ownership. Then there’s the issue of infrastructure, the possibility of other building being built nearby, and even the view, especially in the coastal area.
Of course, there’s a difference if the real estate in question will have a business purpose or if it will be somebody’s house. Because of all this, there are several different methods that can be used to get to a fairly accurate price of a property.
Before estimating begins, it is necessary to determine what kind of property is the subject of that examination.
More precisely, it needs to be established if the property will be:
Once this is defined, the appropriate method can be chosen. This method can also depend on the amount of available data.
This is probably the simplest method of estimating real estate’s value. It is based on comparing the property in question with other similar properties in the same area that were sold relatively recently. This method will likely be used in a densely built area for which there is precise data for every transaction.
This is also a fairly straightforward principle. The method of expenses is based on adding up all the expenses one will have if they decide to build the property in question. The main idea is that the buyer wouldn’t want to pay a price that is higher than all those costs put together.
However, this can mean that many different elements have to be taken into consideration, from the plot’s value to how old the building built there is. This method is usually applied when there isn’t enough data on comparable properties.
The method used primarily when analyzing real estate with a business purpose. In this case, the income generated by the property in question during its lifetime is examined, as well as the expenses that come with it. It is exceptionally important that these two categories can be precisely measured so that projections about the property can be made fairly precisely.
Estimating how much a piece of real estate is worth is a process with many elements which have to be taken into account. This is why this task is best left to experts who are familiar with the real estate market and are on top of the latest trends. They will always be your most reliable source of information.
Still, things like locations, purpose and ownership will always be important and impact the final price in a big way. There’s also the issue of supply and demand, both of which can fluctuate for a variety of reasons. Therefore, if you need any advice, your best decision is to consult a licensed agent. When it comes to the knowledge of real estate prices, they are really hard to beat.
Šibenik
Šibenik
