We often receive questions from customers about the right time to buy an apartment : now or wait a while until the prices “normalize”? Following discussions with our clients, we decided to address a topic that worries everyone, namely: What is the correct price of a property?
Most of the times, the sellers subjectively choose the sale price due to the sentimental investment, and this tends to be much higher than the market price – an aspect that makes the property difficult to sell. At the other end of the spectrum is the situation where the selling price is well below the market price, which makes potential buyers much more reluctant.
A fair price offers the buyer the security of a fair investment, and the seller trading the property in a much shorter time. The value assigned to a property differs depending on the purpose for which it is valued, giving it market value, investment value, assigned value, fair value or special value.
The assigned value is that value established by the local financial authorities for a plot of land and for the existing construction on it, an assessment that is made for the purpose of property taxation, while the estimated value (or market value) is the value given by an expert appraiser to a property. following a thorough analysis of it.
The estimated value or market value of a property in the real estate marketit can be estimated by three methods:
- Estimation from a market perspective : this method analyzes existing information by comparing the prices of properties with characteristics similar to the property you want to buy or sell. For this purpose, aspects will be analyzed such as: the area where the property is located, the usable area, the way of compartmentation, the degree of finishing, the floor, the annexes, etc.
- Estimation from the income perspective. This method analyzes the ability of a property to generate income compared to its costs: utility costs, tax, repairs.
- Estimation from a cost perspective.In the case of this estimation method, the value of the property is analyzed by deducting the accumulated depreciation from the new cost of construction. To this result is added the estimated value of the land.
When is the ideal time to buy property?
Buying property in times of real estate recession: when stock prices fall, when interest rates rise, when there is a high unemployment rate, when consumer confidence falls, then is the ideal time to buy property. When prices are falling the problem is not how much they will go down, but how much you can buy before prices go up again. Purchasing during a real estate recession and at a good price is as important as your ability to withstand such conditions.