Property appraisal is the process of determining the fair market value (FMV) of a property. This is done by analysing the current market and comparing it to similar properties in the same area.
The process starts with an inspection of the property. That means an experienced property professional visits the property, takes measurements, assesses its condition, and uses tools such as comparative market analysis (CMA).
A Comparative Market Analysis (CMA) is a method of estimating the fair market value of a property by comparing it to similar properties that have recently been sold or are currently on the market. By surveying the residential real estate in the same suburb, street, or even building, property professionals can determine accurate pricing.
Fair market value is the price a good would sell for on the open market - where a willing buyer meets a willing seller. Simply put, FMV is what someone is willing to pay and what the other party is willing to accept. This is not to be confused with municipal valuations.
Additionally, the FMV of an apartment will include the cost to build or buy it, property taxes, and transfer duties because an informed buyer will always factor this into their calculations.
Both abroad and locally, the best property appraisers use a hyper-local approach to valuation. That means, the best real estate valuation factors into account the macro-economic environment of the country, the dynamics of the city and suburb, as well as the unique market which evolves in specific apartment buildings. Cape Town property appraisal masters spend a vast amount of time researching and getting to know specific buildings to provide clients with accurate valuations.