Property valuation or real estate appraisal is a process of determining the value of a property, usually performed by a certified specialist, especially when the value is determined for tax or mortgage purposes. The process of valuation also gives a useful insight into the possible pricing of the property. Naturally, the price of a real estate is whatever the seller sets for it, but usually it reflects the value pretty well, as hardly anyone would buy a property, the price of which is substantially higher that its value. Conversely, hardly anyone would be willing to sell a property at a price that is drastically lower than its value - that would mean losing profit.

Parameters

The value of a property is determined by all of its parameters imaginable - anything that may affect the usage or living conditions also affects the value. One aspect that is not included, however, is the emotional/perceptual value, e.g. the fact that the property is a heirloom, or that the neighbours are likeable. Such parameters are highly subjective and will be different for every person, which is why they cannot be taken into consideration - the valuation process tries to determine the objective value of the property.

The most widely used aspects of valuation include:

• general technical condition
  • quality of building materials
  • external insulation
  • the number of recent repairs
• floor of an apartment in a multistorey complex
• the quality of utilities
  • sewers, sanitation and general water supply
  • heat supply
  • electricity
• parking and in-built storage facilities
• lighting, both inside and outside, as well as general beautification of the area (in Latvia, the presence of greenery is especially valued)
• sound and light pollution
• the surrounding infrastructure and facilities
  • roads
  • schools
  • parks
  • shops
  • public transport stops
  • any other facilities needed for a comfortable life