Understanding the Market Value of Your Property is a good read especially when you just bought a property or planning to buy another one. What is market value and how it is computed or calculated? Its uses and purpose? How does the market value of a certain property be computed or determined? A lot of questions might come out if you are planning to sell your properties in the near future.
Read Also: 7 Easy Ways to Get Started in Real Estate Investing in the Philippines
Defining Important Terms to Better Understand the Market Value of Your Property
The value of the entire market that involves the calculation extent or estimation amount to be traded between the buyer and the seller. It is also defined as the price point, rate, tariff, or unit of the assets, investment, or business that will be placed in the marketplace. Market Value is your property’s worth.
The intangible and tangible that has a legal title for its holder like buildings, houses, or land, and intangible like stocks, patents, trade names, or bonds certificate.
Property value is the estimation of a home and the current present worth of the property.
The value of an asset based on the price that would be paid for it if it were sold at a certain time. It is also called the Open Market Value or OPV; it is the amount of the property or estate that will yield in the marketplace. Practically it determines the assets worth of the company or property.
How do/will you know the value of your Property and derive its computation?
To give value to your real property or assets in the general concept is very difficult to determine by just stating an amount or selling point or just by telling its market price. To determine one’s property market value there is a lot of consideration and formulation that needs to be addressed for the right market price or market value. Accuracy is important in determining your Property’s worth because it is your property and it must be equated properly.
Here are some fundamental Strategies you can choose in determining your Property Market Value that will help you in your conclusive decision or in determining the factor points in its computation.
1. Real Estate Appraisal
The Real Estate Appraisal is an appraisal report to determine a sale price of a property. The considerations in the report are the condition of the property, the property’s distinctive features, location valuation if there are mortgages, and of course taxes fees. This reporting and evaluation are done by the Estate Appraisal.
Read Also: A Filipino Homebuyer’s Guide on Real Property Taxation
So how does a real estate appraiser do his/her job?
An Estate Appraisal must be a citizen of the Philippines with good moral character, with a Degree in Bachelor’s Real Estate and it requires a licensure examination.
As for the law, it implies the role of Real Estate Appraisal is duly quoted as follows: REPUBLIC ACT No. 9646 “Real Estate Service Act of the Philippines”.
“Section 2. Declaration of Policy. – The State recognizes the vital role of real estate service practitioners in the social-political, economic development, and progress of the country by promoting the real estate market, stimulating economic activity, and enhancing government income from real property-based transactions. Hence, it shall develop and nurture through proper and effective regulation and supervision a corps of technically competent, responsible, and respected professional real estate service practitioners whose standards of practice and service shall be globally competitive and will promote the growth of the real estate industry.”
In the Philippines we have a total of ten thousand (10,000) licensed appraisers in the country according to the Philippine Regular Commission, and there is an association which is Philippine Association of Estate Board (PAREB), an oldest real estate group with sixty local boards and five thousand 5000 members nationwide. Also important information, there are two dominant and leading realty estate appraisers in the Philippines one is The Philippine Association of Realty Appraisers, Inc. (PARA) a national, non-stock, non-profit professional organization whose members are primarily duly-licensed real estate property appraisers. The second is the Institute of Philippine Realty Appraises is also a nonprofit organization and a member of the International Valuation Standard Council (IVSC). These two pioneering estate appraisers also consistently give webinars training on their respective Facebook pages and websites for leanings and the educational program they are providing comprehensive professional development and recruitment of members from their participants.
2. Comparable Sales Appraisal
In simple terms comparable sales appraisal is the property Market value is defined or interpreted by comparing the property to the other similar in distinction and quality that has been sold recently. In this strategy, your basis of property market value computation is you may look online at some same properties sold within your location or proximity for you to have an idea of how much the value of your property.
3. Zonal Value
By determining your Zonal Value of Bureau of Internal Revenue which corresponds to two important factors: to fairly value your property and the corresponding tax computed Bureau of Internal Revenue. Under Section 6 of the National Internal Revenue Code (NIRC) of 1997, the Commissioner of Internal Revenue (CIR) has the power and authority to determine and prescribe the fair market values of real properties, which are commonly known as zonal values.
There is a law that governs the taxation of the Philippines by the National Internal Revenue Code (NIRC) of 1997 that gives the Bureau of Internal Revenue (BIR) the power and authority to assess and prescribe fair market values of real properties by using zonal values. Republic Act 10963 known as the Tax Reform for Acceleration and Inclusion Act (TRAIN) the Bureau of Internal Revenue has the authority to divide the Philippines into different zones or areas to regulate and calculate the fair market value of real properties. The said properties must undergo consultation with qualified appraisers from the public or private sectors. You may check the list of zonal values on the Bureau of Internal Revenue websites and download them as well.
4. By knowing the computation of your tax rate, Code of 1991 Property Tax Rate.
As noted, Property tax rates are 1% in the province and 2% in cities or Metro Manila. Your Assessed property will be equal to the assessed value of your land plus (+) asset value of the house the total you got multiplied by the estate tax, example if you have P800, 000 value of land and 600,000 value of house = 14,000 X 2% (if the location is Metro Manila) that is equal to 28,000, this is your tax rate. But to come up with its market value there are more included considerations to determine its final computation which is why it is important to know the role of estate appraisal, taxes, and comparable determiners.
To give value to a property is giving value to our hard-earned money and future investment opportunities as well. It concludes our values in valuing the things we own or the properties we invest with whether a house and lot, a ready-to-occupy house and lot, a condominium, or a rent-to-own property. There are a lot of possible computations equal to possible considerations in knowing your property market value. That is why it is important to know the law, deductions, comparison, and other elements inclined within your property.
Property market Value allows us to be able to assess how we value our property that arises with our hard work as an individual and if we want that life with valuing a property with no worry and secured property choose Bria Homes. Bria Homes bring you your life-changing home’s finest quality but understand your needs by presenting you with affordable houses and lots and condominiums that are labeled with the value of their market and along with your value as their customers.
Written by Rowena Lansang