If the realtor does not know how to calculate the market value of a property, inevitably he will not know what the tax is levied on the property, nor where to start setting the price for a possible transaction.

But calm down! In this article, we will clarify what the market value of a property is and show the formula for obtaining it. In addition, we will specify all the components that affect the calculation and the care that the broker needs to take when setting prices for a transaction based on this indicator.

Sky Marketing strives to be Pakistan's biggest real estate developer ever, guaranteeing the highest international standards, prompt execution, and lifetime customer loyalty. With projects like http://www.skymarketing.com.pk/rawalpindi/blue-world-city/

What is the market value of a property?

Roughly speaking, the market value of a property refers to an estimate of the purchase and sale price that the Government stipulates for certain goods - that is, the price that the property would reach in a cash transaction, according to the analysis from the city hall of your city.

To reach this value, the municipality seeks to base the price on the market and determines the final value of the m² of urban land and built/building area.

How to calculate this index?

The main purpose of this assessment is to define the amount of administrative or judicial fees — when necessary — and, in particular, certain taxes. As an example, we have the collection of IPTU (Tax on Urban Territorial Property), at the municipal level.

It is thanks to the calculation of the market value that the city decides which neighborhoods will pay the highest IPTU, which will be the lowest amount charged, and also which parts of the city will be exempt from the charge - in general, neighborhoods located in areas that pose a risk to residents.

Some coefficients are considered when calculating the market value of the property, and they may vary from city to city.

Usually, the calculation takes into account the characteristics of the property (position, age, typology), the function of the building area, the use (commercial, residential or other) and the average m² value for properties in the same street (value standard unit).

In some cities this value is not updated very often. Therefore, a person who has built a small house can be exempt from IPTU for years, even if he has expanded the property. This is because the property's market value has not been updated.

However, it is important to emphasize that the municipality can charge back these amounts. Therefore, before selling a house or land, the owner must try to regularize the situation.

Therefore, the calculation of the property's market value follows the following formula:

V = A x VR x I x P x TR

To know:

• V = market value of the property;
• A = area of ​​land or building;
• VR = standard residential unit value, based on the Generic Plan of Municipal Values ​​(PGV);
• I = age of the property (counted from the granting of “Habite-se”, reconstruction or occupation of the property — when there is no “Habite-se”);
• P = position of the property in the street;
• TR = residential typology or constructive characteristics (modifications, additions, renovations, etc.).

However, keep in mind that the calculation varies from city to city. In the municipality of São Paulo, for example, other components are needed to arrive at the municipal tax amount (such as the subdivision of the urban zone or fiscal zone).

Therefore, it is important to pay attention to municipal legislation to understand the market value of the property that will be sold.

Is there a marketing variation in this equation?

Although the market value of a property is the result of a calculation that considers bureaucratic characteristics, it is important to emphasize that the real estate market can influence the sale price of this property.

This is because investment in real estate is influenced by economic issues, such as releasing credit for financing, for example.

Thus, although the market value of a property is high, it can be negotiated for a lower price, depending on each case. Understanding this type of variation is a tip for the broker to pay attention to sales opportunities, after all, customers will not always be willing to pay what the property is worth.

On the other hand, the increase in demand for properties in a certain neighborhood can inflate the sale, making the broker able to carry out a transaction at a price above the market value. In other words, the broker needs to pay attention to the market value (as stipulated by the city hall) and the real value of the property.

Does ITBI enter the account?

Without a shadow of a doubt. The payment of taxes is essential to be able to close a sale. These taxes must be identified, calculated and regularized.

The amount of this payment must be included in the sale price to avoid losses to the seller and the real estate agent — or even unpleasant surprises to the buyer.

ITBI is a municipal tax directly linked to the sale of real estate. The Property and Property Transfer Tax (ITBI) has an average value of 2% on the market value of a property.

In this case, the tip of the previous topic is very useful, because, if the property has been devalued, it is important to contact the city hall to ask for an update on the sale value.

Therefore, it is clear that the owner or the real estate agent can ask for a review of the market value. However, the municipality may not agree with the arguments presented.

A suggestion for the realtor is to identify which people are exempt from paying the tax. In some cities, municipal employees do not pay ITBI. Knowing this information can help real estate professionals sell to a targeted audience.

There is the possibility of exemption from ITBI in the case of properties financed by Minha Casa, Minha Vida. However, this benefit can also vary by municipality.

What precautions should be taken when transacting real estate?

Finding the market value of a property is the starting point for determining its sale value. However, it is necessary to be careful, as in the transaction of goods, the following still need to be added:

• administration fees;
• the amounts for the removal of documentation;
• the broker's commission for the sale;
• the hours worked by the realtor.

Anyway, all these additions make the sale price of the property well above the market value. Therefore, it should be used as a parameter, but never taken as the final transaction value.

Knowing this, the real estate market tends to pay attention to changes in municipal legislation to avoid losses. The broker can also do this, after all, these are specific issues that usually change.

Furthermore, knowing what influences the market value of a property in the city where you work is essential for your success as a realtor, especially for those who are just starting their careers.

Source: Tajarat.com.pk

Patterjack dog breeds

murshidalam

memories to snapchat