How Can I Estimate a Property's Price?
Estimating the real price of a property is not an easy task. Owners are looking to sell at the highest possible price while buyers are looking to buy at the lowest possible price.
Estimating the price of a property can be difficult for buyers without prior market research. Estimating the price correctly is important for negotiations. There are several ways to get a fair estimate:
To get an accurate estimate of the price of a property, you can check with the real estate agent you are working with to see if he or she thinks the property matches the market price. If your real estate agent is professional and you trust him or her, this option may be sufficient.
An alternative is to use a professional appraiser (Shamay). The Shamay will investigate the property, gathering information from the local authorities, checking the planning status, property rights, building additions, property eligibility, and any transactions in the area. He will then provide a full report on the property, including information on the prices of similar properties in the area, giving you a more accurate idea of the real value of the property.
For buyers who do not wish to use an appraiser, it is possible to estimate the price of a property on your own, primarily by comparing the property to one as similar as possible. You can check the apartments that have been sold in the same building, but keep in mind that the apartments may be different in terms of size and layout.
It is also advisable to visit our website to compare prices and criteria of similar properties in the same neighborhood, or to visit the government real estate website to get information about all the properties sold at the chosen address and in the surrounding area. You will also find a lot of information about the surroundings of the property.
The Immo Israel expert opinion: almost everyone takes a used car for a technical checkup before purchasing it and this is even more important when buying a house! Purchasing a property with the assistance of an expert in the field will help you avoid unpleasant surprises in the future.
Area Prices
Good news: Since 2013, the country has made sales around a given address accessible to all individuals!
To find them, go to the governmental real estate website and enter (in Hebrew) the address of your choice. You can then choose the number of rooms in the homes you wish to compare.
Once you have the recent sales data, select properties that have similar characteristics to the one you want to value (type of property, size, floor, year of construction, etc.). Then, calculate the average price per square meter for these sales to get an estimate of the selling prices in the neighborhood.
Here at ImmoIsrael.com we have made things even easier - all the listings already include the price of the property per square meter! This information has the merit of being precise and indisputable: you can use it to negotiate the price of your future property.
Strengths and Weaknesses
Certain property characteristics are unanimously valued, regardless of individual preferences.
Using the average sale price of property in a certain neighborhood you can establish a price range for properties in that neighborhood and know if an offer is relatively fair, low, or high.
Various characteristics of a property, such as the presence of an elevator or location on a high floor, can have an impact on its overall value. For example, an apartment in a building with an elevator may be considered more valuable and add a 10% increase to the average price, while an apartment on a high floor in a building without an elevator may decrease its value between 10-15%.
It is therefore important to situate the property on a scale of minimum and maximum value, after factoring in all its specific characteristics. The following table provides an estimate of the various capital gains and losses to be taken into account concerning the property you wish to acquire.
Negotiation
By using the tips we've given you to evaluate property prices, you'll be better prepared to begin negotiations.
If you live in Israel, you have probably realized by now that US and Israeli mentalities are somewhat different... Here, negotiations are not done in writing but rather face to face, either via a real estate agent or with the owner directly.
The experts at Immo Israel have several tips to help you through the different stages of the negotiation:
- First of all, always be respectful and leave your ego at home! Remember that the seller is also a human being and that anyone with a wounded ego will be less likely to sell you his property. Instead, try to warm up to the seller, and take the opportunity to ask some important questions - why are they selling the property now? How long has the property been on the market? How eager is the owner to sell?
- Do not discuss the price of the property over the phone and not before you have visited the property at least once! You must first decide whether you are really interested in the property and whether it suits your needs. Begin price negotiations after you have seen and asked all your questions about the property and its surroundings.
- If the property belongs to a new project and the negotiation is with the contractor - keep in mind that the negotiation will not necessarily be for a price reduction but could also include improvements to the property, such as a more modern kitchen or tiles that cost more than the basic ones included. This type of negotiation also works for second hand properties. You can, for example, ask to bring forward the date of entry or offer a larger down payment upon signing the contract, in exchange for a discount or in return for the furniture and air conditioning already in the apartment.
- Don't forget to base your negotiations on the data you gathered whilst estimating the property's price, whether you did so with the help of an appraiser, real estate agent, or by yourself. Use your knowledge to argue your case.
Next post: The Purchasing Process