One important message to remember is do not be emotionally attached to the property to be purchased. Because the main purpose is as a business tool, not for your place of residence. Here are the kinds of property pricing that you must know:
1. Need to Know Transaction Price aka Actual Price
The price at the time of the sale and purchase is actually the transaction price of the property. If you get a price below the price of liquidation, it will certainly be very profitable from the buyer. Conversely, if it can sell at a higher price again, it will definitely benefit the seller.
2. Understand New Reproduction Rates
The new reproduction price is the price of the surrounding land plus the price of the new building. So this price is the sum of the price of market land in the region with the price of the newly constructed building using the current material cost.
This price can also be referred to as replacement cost. This price is generally used by developers or developers to market a property (housing) newly established.
For that, do not be fooled that the price of land offered exceeds the market price. Sometimes, it is just the way developers get extra benefits. Also, make sure you need to have building price data in accordance with current material prices.
3. What is Demand Price?
Well, hereinafter in the world of property there is also the term Request Price. What is that? The demand price is usually called the emotional price. The demand price is the property price offered by the seller to the prospective buyer.
Quite a few sellers are setting emotionally on their property prices. For example, if the house being sold has been used as a residence or occupied by a figure of a famous person (public figure), then the house will usually be offered at a price high enough compared to the market price.
For that, you should as a prospective buyer who wants to invest in property can not easily get hooked with things like this. Keep a close eye on the price of the property market in the area and make sure that the price you are agreeing is still within reasonable limits.
4. Understand What is Market Price
One of the things that must be understood before you invest in this property sector is to understand what the market price is. In the world of property, the market price is the new reproduction price (the price of land plus the price of the new building) reduced by the depreciation of the value of the building.
For example, a newly built house with a price in the range of Rp500 million. Then in the third year, the value of the house is reduced due to various factors, such as the condition of damaged buildings and others.
Well, the reduction in the value of the house is usually about 5% of the starting price. But keep in mind, although the value of the building is reduced or depreciated, but for the value of the land is not reduced. Conversely, the value of land will continue to increase over time.
Therefore, it could be the price of property with buildings that have long still increased. Due to the depreciation of the building price is much smaller than the increase in the market price of land that became the location of the building.
5. Know the Quick Selling Price
Well, this fast selling price must be familiar in the ear. When someone is in need of fresh funds, then he will sell what is owned and allows for sale, not least the house.
The fast selling price is usually used by the bank as a benchmark price for interpretation. This price is also referred to as the price of liquidation, because usually if there is bad credit, then the bank will sell the collateral property below the market price.
Generally for credit provision, this price becomes the reference. The amount is about 80% of the market price of the mortgaged property. Meanwhile, for the remaining 20%, it is the limit of the security level for the bank. So that when sold quickly, the buyer is interested and the process of buying and selling becomes faster.
After knowing the various types of property price determination, then you also need to learn how to interpret or estimate the price of the property that you seek it. In order to do that, there are some tips that you can make a guide in doing business in the property sector so that no one step in making decisions.
There are several ways of valuing a property being sold. Anything? Check out the following reviews:
1. Know the Property Price Pricing of the Local Government
You need to know the property prices set by the local government. Usually each region has different property pricing terms. Look for information on property prices in the area from local government apparatus such as urban, sub-district, or district level.
Property price information can be obtained there because every transaction that occurs is generally recorded in government offices. In addition, banks usually also make an assessment by first comparing the local government office, especially in the office of the land agency.
2. Can Do Cooperation with Property Broker
In order to get the right property price interpretation, you can also cooperate with the property broker. But instead, before choosing a broker, make sure the review (review) about the agent is quite good.
Check out the results of their past performance to be more convincing. Choose a professional agent and have enough flight time. Because with the long experience they have, then the data of buying and selling their property would also be more complete again, right?
So you will get the needed information quickly. Because there is usually some additional information that is usually less understood by ordinary people about the development of an area, so that the effect on property prices in the area.
3. Do your own Market Survey
The next way to assess property is to conduct your own market survey. This is important, because by conducting our own market survey, we know exactly the conditions of the property directly without intermediaries.
How to? You can inquire directly with the local people. Although this takes a lot of time and energy, but this way is considered quite effective. Because you will get actual data. So the price you get will be in accordance with the market price.
4. Do not Hesitate Using Professional Appraisers
Lastly, do not hesitate to use professional and independent property valuation experts. Typically, when applying for a loan, the bank will generally evaluate the property to be used by the prospective customer.
So the bank usually will also propose a professional appraisers they have to interpret the price of the prospective customer’s property. This is done in order to avoid costly interpretation. And you can also file your own appraiser.
So, it is better to use an appraisal that is outside of business hours, so that the cost incurred will be much cheaper but the valuation is still appropriate as appropriate.
Read Also: Practical, Here’s How To Buy Auction Houses via Online!
Profit from Property Investment with the Right Strategy
Assessing a property is not easy. Even so, estimating property prices is also not a difficult thing. All that can be done well and get the right price and reasonable in the ways above. So there is no loss in terms of business or property sector investment that you will do later.
You just need the right strategy, carefulness and patience to do the necessary ways, so you get the best price. Therefore, do not hesitate to always ask and find out the necessary information. Thinking carefully before deciding on a property to buy will be much better than just doing it. Not a profit, even a stump, who knows?