1º What is real estate valuation?
Real estate valuation is the application of a set of techniques, methods and knowledge to estimate the value of a property.
Having said this, the reader must have noticed the use of the word “estimate”: an estimate always implies an error. Therefore, it is crucial that when an evaluation service is contracted, the quality of the service is taken into account. In the following points you will have a better idea of the right questions to ask before proceeding with an evaluation by any entity.
2º What are the factors that most influence the final value of a property?
Understanding which factors most influence the value of a property is a determining factor in making a better valuation. These factors have different importance in different cases and therefore can and should be chosen on a case-by-case basis.
Amongst the most used factors, the following can be pointed out:
- The area;
- The location of the property;
- Constructive quality;
- Finishes and equipment available;
- The age;
- The state of conservation;
- The View;
- The solar orientation;
- The typology and layout of the dwelling.
3º Who makes the real estate evaluation?
If your intention is to make a private valuation, there are several ways you can use it, although it is not at all advisable to do it indiscriminately, as we will explain later.
Among the players that most often lend themselves to making real estate appraisals are:
- Appraisal Companies or the Expert Property Evaluators;
- Existing internet platforms that do the evaluation of your property;
- Real estate agents or real estate companies;
- And you can still check the value attributed by the fiscal evaluation of the property.
4º Is a free valuation a good solution?
Following the previous point where we pointed out the several solutions available to perform a private assessment, we will now highlight some important points in the analysis of these solutions.
Using free platforms
When the client uses one of the many platforms on the internet that claim to evaluate a property free of charge, he should bear in mind that:
Using the value of the fiscal evaluation
- Some of these platforms aim at collecting your data for possible later contacts within the marketing scope;
- Being a simple statistical methodology, it may not take into account all the parameters that an evaluator who travels to the site would have and, as such, the quality of the resulting evaluation will be highly questionable.
The tax evaluations are currently made on a “large scale”, and as such, follow a homogeneous treatment that hardly oscillates according to the current market, therefore when we consider this value to understand the value of a property we will have a very high risk of our conclusion being totally out of touch with reality.
There are still two options left, which we will talk about in the last point, below.
5º What are the advantages of having an impartial valuation?
The valuation made by a real estate agent is not necessarily synonymous of lack of quality, especially if this agent is academically qualified to make a valuation. However, this is not what normally happens and, sometimes, valuations are made without any technical rigour, which results in values that are completely different from reality.
IIn addition, a very important factor for a correct evaluation is that the evaluator in question should not have any interest that can be attributed to him/her in the property being valued. In the case of a real estate agent, this conflict of interest is notorious and can result in delicate situations for both parties.
As you noticed, there is only one option left which is, also, the only one we advise you to use:
Use a valuation company or a Real Estate Evaluator.
To better illustrate this point about the exemption, we leave an extract of a declaration of responsibility that must always accompany an evaluation report:
“The valuation expert declares on his professional honour that he has carried out the evaluation in accordance with the requirements in force. Having examined all the documents provided to him/her.
The evaluator expert has no interest whatsoever in the property being evaluated, nor does he/her have any explicit legal relationship that prevents him/her from carrying out the present valuation. ”
This statement is dated and followed by the signature of the evaluator responsible for valuation of the property.
In other words, it is better to trust the evaluation of a property to the right people!
Now that the reader has understood the complexity inherent to a property evaluation, it will be naturally easier to understand why we advise you to opt for an evaluation performed by a specialized professional and with the proper training to do so.
If you want to know more about what is a specialized professional to perform a property evaluation in Portugal visit our page of Expert Evaluators. If you want to check some of the Experts registered in CMVM you can click on the following link > CMVM