What do you do if you need to make informed property valuation decisions using logical reasoning?

Gather Data: Comparable Sales: This is the cornerstone of logical valuation. Find recent sales of similar properties (size, location, features) in the same area. Analyze their selling price per square foot or use a more sophisticated metric like "adjusted selling price" which considers property differences. Property Characteristics: Consider the property's size, age, condition, amenities, lot size, and any unique features that might add or subtract value. Market Trends: Research current market trends in the area. Is the market hot or cold? Are there factors like new developments or zoning changes that might affect future values?

Logical Reasoning and Analysis: Comparison: Compare the subject property to the comparable sales data. How does it stack up in terms of size, features, and condition? Adjust the comparable prices based on these differences. Market Adjustments: Consider the current market trends. If the market is hot, you might add a premium to the comparable prices. Conversely, a cold market might necessitate a discount. Support Your Reasoning: Document your thought process. Explain why you chose specific comparable properties and how you adjusted their prices. Mention relevant market trends that influenced your decision.

For residential properties many mortgage brokers and realtors have access to valuation tools - reach out to someone in your network and ask if they can pull a valuation or comps for you. Understand that these numbers may not be 100% accurate to what an appraiser would say but they can be a great point of reference or place to start. As a loan officer I do this for many of my investment clients to help them get an idea of where the value and market rents may fall.

Professional Appraiser: While logical reasoning can be powerful, for high-value properties or complex situations, consider consulting a licensed appraiser. They have access to more comprehensive data and expertise in applying valuation methodologies.

If you are evaluating property for yourself do not allow yourself to become emotionally attached to the deal - especially if it is intended as an investment property. Make sure you are analyzing the hard facts of the property and now becoming too invested before you understand the bottom line.