LOS ANGELES, CA / ACCESSWIRE / October 9, 2018 /
What is the Resale Value of Your Property?
When computing for property value, numerous individuals often overly rely on the estimates from property within their vicinity. Although this approach may work, it is prudent to consider your bottom line.
So, how do you Determine the Resale Value for your Property?
There are many reasons for property valuation, one being to ascertain its selling price. When one decides to dispose his or her property, the issue of price always comes into play. They may opt to fix the price based on the ongoing market rate or simply choose the best possible price which will enhance a quick sale. However, it is appalling that many people do not consider the possible cash return from the sale of the property. Selling your property without taking due diligence in analysing optimal possible income generation may leave you surprised at how much loss you have incurred. When you dispose your asset at a less-than-expected value, it is referred to as seller's remorse.
Normally, you should only opt to sell your real asset after objectively determining what you expect to obtain from it. Nevertheless, many individuals tend to literally estimate this figure. In case you have invested a significant amount of equity in the asset, it is not a big deal. On the other hand, if you do not have enormous equity, then you should begin its computation; otherwise, you risk experiencing a big shock.
When ascertaining the actual sales value, begin by estimating the market price you expect to sell it and subtract the unsettled balance in case of a prevailing mortgage. Although this practice helps you estimate your equity, do not solely rely on it as the ultimate resale value. To the contrary, take you ample time and take other aspects of cost into account, including:
1. Prepayment penalties on your mortgage
2. The prevailing property taxes with respect to the applicable year the property is being sold
3. Additional costs (if any) incurred in repairs and maintenance of the property to promote its ease of selling
4. Contractual fees such as the attorney's fees in case your state requires a lawyer to take part in the process.
5. Any incidental expenses relating to the sale as explicitly or otherwise expressed in the sales and purchase agreement. Typical incidental costs can include but not limited to recording fees, insurance premiums, warranty insurance, inspection fees, escrow fees among others.
Ironically, one area you entirely forget to include in the estimation turns out to be the costly expense. Also, if you engage the services of an agent, you will incur a significant expense in commission. An ordinary commission of 6% on a property with a resale value of $300, 000 is a whooping $18, 000. Many savvy sellers are evading this commission by eliminating agents in the sale of their properties. This makes tremendous sense due to the significant amount of money entailed. Nonetheless, when computing for the resale value, you ought to figure out how you will go about selling the real asset, including the applicable cost incurred in the sale.
Simply put, despite the emotional nature of the sales decision, ensure to be logical and objective. The decision should incorporate a hard and in-depth analysis of the financial aspects involved.
NMS has offered quality rentals in the Los Angeles area for nearly three decades. Since 1988, NMS has developed and managed a large portfolio of premier apartment buildings and commercial properties in Santa Monica, West Los Angeles, Brentwood and the San Fernando Valley
By: Jessica Zalban
SOURCE: NMS Properties, Inc.