To maximize condo sale profits, it is essential to understand the appraisal mechanism and evaluation points in advance. Appraised values differ greatly by real estate company, with differences sometimes reaching millions of yen. This article explains from appraisal method selection to 10 evaluation points and the importance of multiple estimates, for investors and owners.
What Are the 2 Types of Condo Appraisals?
There are 2 types of appraisal: "desk appraisal" and "visit appraisal," and using them according to purpose is important.
What Is Desk Appraisal (Simple Appraisal)?
A method of calculating the amount based on sale and contract case data for similar nearby properties and market data without visiting the property. Since results come out for free and quickly, it's suitable for initial research when comparing appraisals from multiple companies.
What Is Visit Appraisal (Detailed Appraisal)?
A real estate company visits the site and confirms in detail: room condition, location conditions, boundaries, utilities, earthquake resistance standards, noise, etc. Visit appraisal is recommended when you want to know the accurate sale amount.
10 Points That Move Condo Appraisal Values
Points That Raise Appraisal Value
- High floor and good view — Panoramic views and sunlight from high floors are major strengths
- Corner unit — Multiple windows and openness are evaluated positively
- South-facing — Sunlight brings a premium
- Building reputation and brand — Condos from famous developers have a brand premium
- Within 5-minute walk from station — Proximity to station is always important in any market environment
Points That Lower Appraisal Value
- Deterioration from aging — Aging is natural but has a negative impact
- West-facing — Western sun creates afternoon heat issues
- No renovation — Updated kitchen/bathroom improves evaluation
- Accumulated repair reserve fund issues — Low balance or unreasonable management raises concerns about future large-scale repairs
- Surroundings — Nearby convenience stores and stations are positives, while adjacent roads and industrial areas are negatives
Why Multiple Company Estimates Are Essential
While it's natural for appraisal values to differ by company, getting at least 3 companies is recommended. An overly high appraisal is a sales tactic, and an overly low appraisal may reflect the company's motivation. Checking multiple companies is essential for knowing the accurate market value.
For strategy after appraising your condo, also see How to Avoid Losses in Real Estate Sales.
FAQ
- Q. What's the best timing to appraise a condo?
- A. Appraising at least 3-6 months before actual sale is recommended. By having time for comparison study and strategy formulation, you can maximize the sale price.
- Q. Does renovation before appraisal increase the appraisal value?
- A. Partial renovation may raise the appraisal value, but return on investment is not always good. Consulting a specialist before a full renovation is recommended.
- Q. Is a high appraisal better?
- A. Not necessarily. Appraisals that are too high may be a sales tactic, and if the property stays unsold, price reductions become necessary. Selecting a company that can provide realistic appraisals is more important.
