Tuesday, January 25, 2011

Obtaining The Right Value Assessment: Property Prices

One of the most common misconceptions that property owners have is that property prices will keep rising regardless of the effect on the market of factors such as the political and economic situation in the country. The reality is that after every boom in the property market, property prices go through a period of 'correction'; they adjust to actual values rather then speculative ones; the span of such corrections can last for a very long time.
As a result, most property owners have no idea what the current market values of their property is and end up consulting a number of estate agents who in turn provide their own assessments of the property's value. In most cases there is a wide gap in the estimates provided by different estate agents, which adds to the confusion of the property owner in terms of what price to demand and they end up listing their property with the estate agent who quoted the highest value. Yet, a number of estate agents deliberately and incorrectly quote higher prices just to ensure that the owner lists the property with them. This is a unethical practice which does nothing more than make property owners happy for a short period of time.
1) Ask the estate agent to give the current property price assessment on company letterhead; but be prepared to pay a fee for this service.
2) If you plan to have an assessment done from different estate agents, do not look only at the highest value; rather consider the lowest assessment given to determine the actual value of the property.
3) Any estimate that is over two to three years old is no longer valid as property prices fluctuate depending on a number of factors which in turn end up keeping investors away.
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