The Value in Real Estate Many people believe that real estate appraisals are used to create or establish value. That is not the case! Lenders, investors, governmental agencies and businesses use appraisals as a supported estimate or opinion of value. Determining value in the real estate market is generally based on four elements: Scarcity - in areas where there is too much property, the value decreases. On the flip side of that, when an area sells most of its properties, the balance tends to increase in value. Demand - there must be a demand for the property and the ability to pay for it. Utility - The property must be useful, satisfying your wants and needs. This is called subjective value Transferability - ownership must be able to be transferred from one party to another. In a...
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