Property valuation is the process of determining the value of a piece of real estate. Property value is influenced by two factors: supply and demand. When demand is high, prices will rise. When supply is fixed, prices will fall. Increasing supply is possible by building new properties or splitting up large structures into smaller units.You may want to check out Real estate appraiser  for more.

The valuation process begins by defining the problem. This involves identifying the real estate and rights, the date and definition of value, and the assumptions and limiting conditions. Next, the appraiser gathers information to arrive at the value. In some cases, a survey is required. Some of the valuation methods are purely market-based, while others are based on specialized knowledge.
A professional appraiser uses a combination of art and science to arrive at a value. These professionals do not have an emotional attachment to the property and are unbiased third parties. They study market trends and data in order to adjust the value of the subject property. For example, a new roof and pool in a similar neighborhood may make the subject property worth more than a comparable property with a leaking roof and no pool.
Another approach used to value property is the income capitalization approach. This is a widely used method for valuing larger income-producing properties. In this approach, market-supported yields are applied to the projected cash flows of the property. The resulting value usually reflects the lump sum reversion value from the eventual sale of the property. The reversion value typically ranges from sixteen to twenty-one times the NOI of the year of sale.
The profit method is a good option for properties with only slight evidence of rate-setting. Hotels, restaurants, and old age homes are examples of properties using this approach. This method focuses on the cash-flow value of properties that are covered by insurance. Although this method is not strictly binding, it is generally accepted as an industry standard of value.
Generally, a fair market value is the best estimate of a property’s worth in a competitive market. The best method of determining market value involves gathering data on both the property itself and the market conditions surrounding it. Besides knowing the condition of the property, it’s also helpful to consider the scarcity of comparable properties.
When making a decision on a property purchase, it’s essential to consider the sales price of comparable properties in the area. Comparable sales data helps the appraiser determine the property’s value. For example, a home with similar characteristics may be worth more than one that is similar. Market conditions, location, and size of the property are also important factors.
Property valuation is a process in which an appraiser or valuer visits the property and creates a realistic impression of the property. This information will help buyers decide on a fair deal. It’s also useful for homeowners as it will give them an idea of the value of their home, especially after renovations and improvements.