How to evaluate a property

When you are about to buy a new home or sell yours, it can be very useful to know  how to value a property  . However, understanding how much a building or property can be worth economically is not so simple. The most appropriate method includes several parameters and factors that can significantly modify and determine the final valuation. In fact, when analyzing  how to value a house,  it may be necessary to distinguish between cadastral value and market value, but also to calculate the estimate per square meter, identify the coefficients of merit and much more.

What is the purpose of property appraisal?

Understanding what is the correct amount of money for selling your home and understanding  how to value a property  is the first step to proceed correctly towards an adequate buying and selling procedure. Requesting a home valuation can be a decision dictated by several factors. As expected, this procedure is undoubtedly useful when you are thinking of selling a property and want to have a first idea of ​​what you could ask potential buyers. In addition, in this way, it is also possible to have a method of comparison with all the houses to buy, always keeping in mind the parameters that can cause an increase or decrease in value.

 Many people believe that the  value of a property  is simply the cost of the house at the time of the deed and purchase. In reality, many factors can influence a change in the value of a property. In addition, the appraisal is essential in the case where a mortgage or other financial instrument is linked to it. Even if you want to rent a house, knowing how  to value a property  is essential. Depending on the value of the house, it is also possible to increase or decrease the monthly rent, avoiding overestimating or underestimating the real estate value. In addition, not only the value of the individual property is valid as a construction, but many other factors such as the market, the characteristics of the house, the context and other elements. The advice is to rely on professionals in the sector, capable of evaluating a property  very carefully and following strict parameters. Here are the parameters used for real estate appraisal vaud . 

Cadastral value and market value: differences

Before proceeding with the request to a specialized firm or a trusted real estate agent, it may be necessary to understand the difference between the  cadastral value and the market value  . These two terms are used in real estate to identify the value of a property, but they have very different characteristics.

Market value is usually described by the term “commercial value”. When you intend to set the sale price of a property or asset, this is the value you are looking for through a specific method and calculation. The cadastral value, on the other hand, is an indicator mainly used for tax purposes, as it can be useful for calculating various elements. These include inheritance or mortgage taxes. This value is also complex to calculate and may require the help of a professional in the sector. If you are looking for more information on how to value a property  through market value and cadastral value, more information is available below.

How to Evaluate a House: The Formula

As expected, then, if you want to know  how to value a property,  it may be necessary to identify its market value. This term describes a particular mathematical formula that can be summarized as follows:

Market value = Commercial area x Price per square meter x Merit coefficients

The market value is therefore given by multiplying the commercial surface area by the quotation per square meter and the merit coefficients. The first element, the commercial surface area, is given by the sum of the covered and uncovered surfaces. For example, not only the surface area of ​​the house alone but also that of the garden or the terrace.

In addition, the estimate per square meter of the property and the coefficients of merit are also required. The first data can be easily found in a database of the Revenue Agency. The second data is instead composed of percentages of different values ​​depending on certain parameters, for example the soil, the presence of outdoor spaces such as the garden, the brightness, the exposure and many others.

Cadastral value of the property: the commercial zone

Among the useful parameters to know how  to evaluate a property  is the commercial surface. This term indicates the surface of a pedestrian property. In fact, generally, when we consider the area of ​​a house, we indicate the floor area, for example 80 square meters or 200 square meters.

Instead, the commercial area is usually composed of different elements, for example, perimeter walls and balconies. The characteristics of this parameter are different: first it is expressed in square meters, then the perimeter walls are added to the pedestrian area, and then those surrounding the house. Usually, an orientation method is used to do this, adding 5% of the walkable area.

After adding the perimeter walls to the pedestrian area, balconies, gardens and terraces must also be added, but only 30% of their area. In this way, by making the total sum, the commercial area of ​​the property is obtained.

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