Accurate and professional real estate valuation is the result of several specialists cooperating. As determining the value of the real estate requires the collection of a lot of accurate information, the pre-valuation stage is the process of searching for information and conducting a field inspection of the property to provide accurate and clear inputs to the report, which contributes to determining the value and selecting the basis for evaluation perfectly.
In today’s article, we will address the most important details about the field of real estate inspection and the differences and similarities between it and the process of evaluating the property and issuing the report.
What is real estate valuation?
Real estate valuation is defined as the process of determining the value or the set of procedures followed by the valuer to determine and estimate the value of the property in the real estate market through the application of international valuation standards. Whether it is for commercial real estate, residential properties, or land.
An individual working in real estate valuation, a group of individuals, or a professional real estate valuation company such as Aain Real Estate Valuation conducts the valuation. They possess the necessary qualifications, ability, and experience to perform the valuation while adhering to international standards with competence, objectivity, and impartiality.
What is a real estate inspection?
Researching and investigating real estate information and conditions involve different methods. One approach is obtaining available data about the real estate market under evaluation. Another method is field inspection, where a specialized individual visits the property, visually inspects it, and records information reliably.
Another type is field inspection, which is done by a specialized individual visiting the property and visually inspecting it to record the information reliably. The type of real estate is also an important factor in determining the inspection procedures.
For example, the inspection of residential properties is concerned with determining the quality of finishes and other internal factors that affect the owner’s livelihood. A commercial real estate inspection is more aimed at knowing the level of activity of the site as well as verifying the extent to which the property meets the needs of the potential commercial activity such as having separate entrances and car parking.
Real estate inspections are divided into two main types: internal and external real estate inspection.
The procedures of the real estate inspection process can be organized into the following:
- Defining the work area, collecting documents, and ownership of the property and any rights associated with it.
- Obtaining information about the size and characteristics of the site.
- Ascertaining the specifications and condition of the real estate.
- Research the characteristics, specifications, and adequacy of services available to the real estate.
- Check for any information on the condition of the land and soil if the assessment is to be carried out on land.
- Identify actual or potential environmental risks and factors that may affect the property.
- Ascertain the permits or legal restrictions imposed on the use of the property and buildings, and any anticipated or potential changes to these permits.
Inspectioning the real estate internally:
By visiting the property and examining it directly. The condition of the property is checked from the inside, and it is determined:
- Finishes and materials: By evaluating the quality of interior finishes and materials used in construction, such as floors, walls, and ceilings.
- Ventilation and lighting: The quality of ventilation and the distribution of light in the property is checked.
- Spaces and divisions: Evaluate the size of the rooms and internal divisions and how they are utilized, as well as the number of rooms, their level of finishing, and decorations.
- Facilities and services: Check the existence and condition of the necessary utilities such as water, electricity, heating, and cooling systems.
- Nearby services: such as transportation, schools, and shopping malls are also evaluated
- Property disadvantages: Identify defects in the property such as cracks in the walls, water leaks, and inadequate foundation, which will represent additional costs in terms of maintenance.
Inspectioning the real estate externally:
The process of inspectioning the real estate from the outside to get a comprehensive view of its condition:
- real estate facade: Checking the condition of the façade, including paint, windows, doors, roof, and any visible cracks or damage
- Location and yard: The location of the real estate and the size of the yard are evaluated, and how this affects the value of the real estate
- Facilities and services: Services near the real estate, such as transport, schools, and shopping malls, are also evaluated.
The differences and similarities between the inspection and real estate valuation:
Real estate inspection and valuation both aim to determine the value of real estate, but they differ in how they achieve this goal. Here’s a comparison:
Purpose:
inspectioning: The purpose of inspectioning is to see the condition of the real estate and identify its advantages and disadvantages directly.
valuation: valuation aims to determine the fair value of a property based on available information and analyses.
Detail and accuracy:
inspection: The inspection requires accurate details about the condition of the property inside and out.
valuation: it requires accurate analyses of the available data and comparing it to the local market.
Timeline:
inspection: it can be a short process that takes place in a single day.
valuation: A property appraisal may take longer as it requires a thorough analysis of data and information.
Skills required:
inspectioning: requires technical skills to assess the condition of the property and identify its advantages and disadvantages.
valuation: requires analytical and economic skills to determine the fair value of the property.
Result:
inspection: it results in a report describing the condition of the real estate and its advantages and disadvantages.
valuation: This results in a report that determines the fair value of the property based on economic and market analyses.
To get an accurate and fair real estate valuation, you need to deal with a professional real estate valuation company that is familiar with the latest market developments and follows all international standards and updates to the real estate valuation to estimate the value properly. Hire a real estate valuer and benefit from the expertise of the top real estate valuation experts accredited by the Saudi Authority for Accredited Valuers.
In short, a real estate valuation follows the inspection stage, involving an in-depth analysis of the available information to determine the property’s fair value. The inspection, as part of the valuation process, directly assesses the real estate’s condition.