1. What is Market Value of Property?

The market value of a property is the estimated amount for which it should sell on the date of valuation between a willing buyer and a willing seller in an arm's-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion.

2. How Does the Calculator Work?

The calculator uses the market value formula:

Where:

• Comparable Sales Average — The average price of similar properties recently sold in the same area
• Adjustments — Factors that account for differences between the subject property and comparable properties (size, condition, location, etc.)

Explanation: The comparable sales approach is one of the most common methods for determining a property's market value, especially for residential properties.

3. Importance of Market Value Calculation

Details: Accurate market value estimation is crucial for buying/selling decisions, property tax assessments, mortgage lending, insurance purposes, and investment analysis.

4. Using the Calculator

Tips: Enter the average of comparable property sales in your currency, then add any necessary adjustments (positive or negative) to account for differences with your property.

5. Frequently Asked Questions (FAQ)

Q1: How many comparable sales should I consider?
A: Typically 3-5 recent sales (within last 6 months) of similar properties in the same neighborhood provide a good basis for comparison.

Q2: What factors typically require adjustments?
A: Common adjustments include square footage, number of bedrooms/bathrooms, lot size, condition, age, amenities, and location differences.

Q3: How accurate is this method?
A: When proper comparables are selected and appropriate adjustments made, this method can provide a reliable estimate, though professional appraisals may be needed for precise valuations.

Q4: Should I use list prices or sale prices for comparables?
A: Always use actual sale prices rather than listing prices, as these reflect what buyers were actually willing to pay.

Q5: When is this method not appropriate?
A: For unique properties with no good comparables, or in markets with very few recent sales, other valuation methods like income approach may be more appropriate.