Last Updated on October 7, 2020 by Admin
If you are a novice in the field of property, or just a beginner interested in the real estate business, or maybe just someone who wants to learn more about it, you have landed on the right page. These words will guide you to a better and clearer understanding for sure. For in-depth information, you can also visit Perth Property Valuers. They have some great guides too.
The extensive scope of the term property-
In layman’s term, the property is nothing but what you own or possess. But, this is a very narrow approach to look at it. In actual as well as legal sense, it has a much broader meaning than that.
It is anything over which an individual or juristic person has a legal title and gets some enforceable rights over it as a result. They are generally considered as assets because of having a monetary value.
Types of property-
When you think of a property, you think of large buildings, land, or basically everything tangible. But, even something intangible, having a value in terms of money, falls under the definition of property.
Many-a-times, you would have heard about valuing the goodwill of a company. Well, it is nothing but intangible property. Anything which is a creation of human intellect also falls under it and is known as intellectual property.
A little spotlight on property valuation-
As the name suggests, it is the worth of the property in the market in terms of money. It is essential for both parties, the buyer as well as the seller. It forms a benchmark based on which the parties can negotiate and come to an amicable value acceptable to both.
Significance of property valuation-
It is not essential merely in a real-estate sense but is beneficial for the owner in multiple ways.
- Buying and selling- No law makes it mandatory to get the property evaluated before trading in it. It is more of a precautionary measure. If you are a seller, you would want to do your homework before selling your property to derive the maximum benefit out of it. Similarly, if you are a buyer, you would not want the other party to outsmart you and charge you a price higher than what is the actual worth. We all love our hard earn money, don’t we?
- Mortgage purposes- Almost every financial institution, be it a bank or a private institution, requires the valuation report before granting any type of loan to anybody. The loan is generally provided against the property only, and it acts as a guarantee.
- Taxation purposes- The tax laws of a lot of countries make it mandatory for the taxpayer to get the property valued correctly because various types of taxes are calculated based on valuation only. Also, it is essential for legal tax saving and planning.
- Insurance- It is a mandatory condition put forward by many institutions as the first step to grant insurance.
- Stamp duty– Legal transfer of a property makes the payment of stamp duty obligatory. It is calculated based on the value of the property, or as a percentage of the same.
- Charging rent- The valuation becomes of utmost importance while deciding the rent to be charged, be it for something as small as a house or something as huge as a whole business.
- Other purposes such as bank guarantees, auctioning, to calculate depreciation, acquisition by the authorities, preparing will, testament, division of property, partition, etc.
- In the case of intellectual property, its valuation is essential from the perspective of selling, licensing, franchising, tax optimization, investing in further research and development, etc.
The valuation of a property depends on various factors like market conditions, geographical locations, inflation rate, etc. The methods involved differ from country to country.
Not to forget, the evaluation of an intellectual property is as important as that of a tangible one.
Various online sites are claiming to assess the property, but some are just sham. Every coin has two sides, the same way technology can be a boon when used positively, but a bane when used in a negative direction.
Do not consider property valuation as a burden or an undesirable expenditure. It is not a luxury but a necessity. An accurate valuation can work wonders in your favor.