Major Sources of Real Estate Property Valuation Information

Adequate and dependable real estate property and market information is crucial in the practice of professional and ethical real estate property valuation.

On the other hand, inadequate and flaky property market data or info has a high tendency to carry its users astray and produce inaccurate property valuations that can instigate worrying trends.

Incorrect or improper valuations can have a negative impact on investor confidence, property market performance, the economy, and generally derail investments in real properties.

For this reason, the availability of correct and reliable property market information should be taken seriously and consistently used to maintain or improve property valuation practices in:

• the purchase, sale, and letting of properties
• real estate insurance and taxation and insurance
• real estate investment and management
• real estate inheritance and settlement
• asset allocation, re-allocation, and sharing, and
• government privatization and divestiture programs

As an interested individual, investor, or prospective buyer, you may find that the following sources or practitioners have the kind of property market information that can be used to conduct proper property valuation and evaluate the worth of various kinds of properties:

1. Property sellers               

Sellers may have their own property market database, or they may represent property owners, public institutions, estate agents, estate developers, or even their own professional colleagues.

Many sellers actually go the extra mile to conduct their own “informal” research and obtain information concerning recent sales of properties that they are personally aware of in a locality or an area.

Good sellers are knowledgeable enough to evaluate properties and make critical decisions concerning the asking prices for properties. It’s important to point out that because property valuation has many variables, the pricing of income properties might not always be as highly precise or accurate as it could be.

2. Real estate brokers and agents

Brokers and agents can also have their own database. On the other hand, they may represent property owners, public institutions, or their professional colleagues.

Good brokers and agents have access to highly valuable competitive market analysis (CMA) or the “broker price opinion” (BPO) which is more in-depth; both represent estimates of market value for properties that exist in local areas.

Because brokers and agents periodically monitor the listing and sale of corresponding properties, they provide information about CMA and BPO to property owners with the aim of acquiring listings on various properties.

Based on property valuation information, brokers’ and agents’ property valuations can be reasonable or fair; however, it’s important for a buyer to note that valuations can rise higher if an agent or broker is aware that they would personally be given higher compensation if their valuation attracts a higher sales price.

3. Professional property appraisers

Like sellers, brokers, and agents, professional property appraisers can also have their own database, or they may represent property owners, public institutions, or their professional colleagues during property valuations.

In many instances, lenders and property owners hire professional property appraisers or valuation specialists to estimate the value of properties at/around a particular time.

Appraisers are rarely consulted by sellers who may only establish contact when the sale of a property is caused by litigation or probate will, or when the government is either the buyer or seller of a property.

Concluding remarks

Accurate property market information is not always easy to come by. As a result, over the years, countries—especially Western developed ones—have been assembling relevant information, formulating institutions, and creating and improving access to reliable property market information.

Quite a lot has been achieved because of the interest, concern, and care that some practitioners have shown towards property information/data collection and the administration of a property market databank to help provide reliable property market data.

Their unwavering dedication could suggest a need for property valuers or evaluators and estate agents to undergo regular and applicable training which can develop and enhance their valuation knowledge, capabilities, and skills.

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