How to calculate market value of a property?

Knowing how to calculate market value of a property is determined by a number of factors, including its location, size, condition, amenities, and current market trends. In India, a number of factors affect a property's market value. Properties in desirable locations tend to fetch higher prices, therefore location is important. Property value is also influenced by factors including size, condition, amenities, accessibility to necessary services, and local equitable development. 

How to Find Market Value of Property?

CMA entails examining recently sold properties in the same neighbourhood that are comparable to the property under evaluation in terms of size, condition, and features. Comparing the sale prices of these properties can estimate the market value of the subject property.

How to Determine Market Value Of Property?

• Gather Information: Be aware of the size, location, and kind of your property (residential, commercial, etc.).

• Locate Similar Sales: Seek out properties that are comparable to yours that have recently sold.

• Determine the benchmark value. Multiply the total square footage of your property by the average price per square foot of similar properties. 

Market Value = Average Price per Square Foot of Similar Properties x Target Property's Square Foot

Assume that your property is a 500 square foot residential apartment. 88,200 is the average rate per square metre. Square feet to square metres conversion:

The built-up area is 600 square feet (500 square feet × 1.2) ÷ 10.76 = 55.762 square metres.

Market value, rounded to 4,918,200, is 88,200×55.762 = 4,918,200.

I hope this helps!

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Fair Value vs Market Value: Key Differences and Examples

Market value of any property is the price at which that property would sell under normal conditions. The normal condition excludes the condition of selling the property due to any unforeseen circumstances which may change the market value of that property depending upon that situation.

Below are a number of factors on which the market value of a property is based on:

1. Property Location

The present market value of your property is primarily dependent upon the location of that property.  In terms of location factors such as availability of transportation, major landmarks, and many other things affects the market value. 

2. Condition of the property & property-type

The present condition of that property internally and externally including availability of water, sewage system, size of the property, number of rooms, etc. are some of the elements that have a direct effect on the market value of that property.

3. Comparative prices of the properties in the neighbourhood

While estimating the market value of a property, you should always keep in mind that you are evaluating the market value of one particular house only. Market value of a property majorly depends upon the cost at which similar properties in the neighbourhood were sold previously, so while calculating the market value the location of the property or its neighbourhood should be the starting point for your estimation related to market value of that property. In comparison to the neighbourhood, if your property is newer and larger in size and is having any additional features, then the market value may be a little bit higher as you can add up the cost to the final sale price.

4. Demand & Supply

The market value may rise or fall depending on the basis of demand and supply in that particular region. Its calculation is done considering the number of homes available for sale in that area and the number of buyers in that area.

Calculating market value of your property is very important while buying or selling a property. Here are a few ways to calculate market value of your property a. Use Online Valuation tools There are many tools available online for checking the valuation of your property. I researched a bit while selling my property and found one with the name Viluvalu and I would say, it was quite accurate with the calculations. These tools will help you get an overall idea of the current price of property in your locality. b. Get Comparative Market Analysis Majority of the people do is compare various properties in and around your locality and you too can do the same. You can note down the prices of the property depending on the area, type, age, construction condition and so on. This will give you a thorough idea about the price of your property. c. Search for the Property Yourself by Contacting Real Estate Advisors You can always take a Real Estate Advisors help if needed as they would know the exact value of your property. However, there is always a possibility that he/she might persuade you to make a deal through them and ask for a commission. So it is better to research online and enquire about the property rates in your area before going to a Real Estate Advisors.