Historically accepted strategies for estimating the value of real estate include three approaches. Seniors are encouraged to be mindful of the effect globalization has on the local economy when considering property value.
One approach to value is the cost. Cost is a calculation that informs the buyer the price that would have to be paid for land and construction of a similar building. One can look at the cost of the land plus the cost of construction less the depreciation.
Sales comparison compares the characteristics of one's property to comparable properties that have recently sold in similar transactions. Characteristics would include the size of the lot, the size and age of the building, and more. The sales comparison value is an estimate of a measure of the degree of characteristics.
Income capitalization is a speculative value of a rate of return. The process involves the level of (what market will bear) rent the property can be expected to generate. This includes a projection of resale value.
Seniors can use both a licensed realtor and a licensed appraiser when determining a sale price for their property. Comparative market analysis is performed by a licensed realtor and includes a comprehensive list of the property and characteristics. Some lending agencies will want a licensed appraiser to estimate the value of the real estate to prevent the buyer from over paying.
The globalization effect speaks of the geographical changes secondary to the alteration of the flow of money. How stable is community infrastructure. Altering the flow of money shifts available community services which plays a direct role in buyer desire. Simply where is your property in relation to the current economic activity in your region of residence.
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