Kyle Broom, owner of Badger Realty Team, provides insight into the world of valuations and appraisals in real estate and why these items are important in decision-making.
In real estate, making the right decisions can often mean the difference between success and missed opportunities. From property transactions to investments, every step requires a thorough understanding of a property’s value. Valuations play a pivotal role in this process, offering insights and enabling stakeholders to make informed decisions.
When dealing with real estate transactions, one key aspect that often goes unnoticed is labeling. Properly labeling a property starts with understanding its zoning regulations, which define the allowed uses for that specific site or parcel of land. Zoning can significantly impact the potential value and usability of a property, making it essential to work with professionals who have a thorough understanding of zoning laws and regulations. By doing so, owners can fully utilize a property with their intended use.
Additionally, involving a broker is highly beneficial. Brokers, or as we at Greywolf Partners call them, advisors, provide a wealth of expertise and knowledge. These professionals provide three key advantages:
- Legal Protection: Engaging with a brokerage places the legal responsibility of the transaction onto the broker’s shoulders. This protects buyers and sellers from potential legal complications that may arise during the deal.
- Expert Negotiating Skills: Brokers are skilled at art of negotiation. They focus and fight to secure the best possible deal for their clients. Whether buying or selling, having a skilled negotiator by your side can make a significant difference in the outcome of a transaction.
- Proactive Customer Care: Brokers actively seek out opportunities to turn their clients’ real estate dreams into reality. They work tirelessly to match buyers with the right properties and help sellers find suitable buyers, streamlining the transaction process.
The Importance of Property Evaluations & Appraisals
The key to evaluating commercial or residential properties lies in understanding the purpose of the investment. Commercial properties are often geared towards generating income, while residential properties are generally intended for personal use and profit from future sales. Understanding the purpose of the investment helps when evaluating a property for an appraisal.
Real estate appraisals are essential tools for various purposes. They help determine the current market value of a property for buying or selling, can ensure property assessments are accurate and play a significant role in settling estates. Appraisals are also valuable in eminent domain cases, where public bodies attempt to acquire private land for public use.
Appraisals are also particularly valuable when considering real estate investments. The appraisal provides insights into the property’s current worth and potential future value after improvements, helping owners or investors to make informed decisions.
Keep an Open Mind
A forward-thinking approach is essential when dealing with real estate in general. It is important to keep an open mind and embrace the possibilities in order to imagine and ultimately realize a property’s true potential. If the focus of what can be achieved is kept on land usage and maximizing square footage, then significant growth and upside in the real estate market can happen. In turn, the open-minded approach can also help identify untapped potential for owners, investors or developers to maximize returns on their investments.
Successful outcomes occur when there is an understanding about the importance of valuations and the role they play in a real estate transaction. This knowledge, combined with an understanding of the importance of zoning laws and regulations and a broker’s involvement in the real estate process all help to increase the likelihood of a positive real estate transaction for a buyer, seller or investor. By recognizing the power of valuations, stakeholders can unlock opportunities and navigate the real estate market with confidence.