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Home Appraisal 101: Ways to Know the Value of Your Property

Learn about home appraisal and how it can help you when you want to refinance or sell your property

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One of the factors that make real estate a foolproof long-term investment is the general trend that the market value of properties tend to appreciate over time. Some factors may cause minor fluctuations, but the upward trajectory is still the trend.

Aside from being a wise long-term investment, having a property to call your own provides stability and peace of mind, especially in times of uncertainty.

The beauty of investing in real estate is that the possibilities are endless. For property owners, you are probably looking for ways to get the most value out of your property, so the first step is to determine the property's actual value. So if you are planning to sell your home for profit and you would like to enlist it with a real estate company like RE/MAX Philippines, it is necessary to it is crucial to get a home appraisal for an unbiased assessment.

A home appraisal is defined as an independent, unbiased assessment of how much your property is worth, and is conducted by a certified real estate appraiser. One of the factors that a certified real estate appraiser assesses is the physical condition of a property. A well-maintained property is most definitely going to sell at a higher price compared to a dilapidated one.

Additionally, if your property is in a location with access to different modes of transportation and near the vicinity of land development, it is most likely that your property will increase in value.

However, there are also factors that lead to the value depreciation of a property. One is the neighborhood of your property and the current market price there. If the neighborhood has deteriorated, has become inaccessible, or has been subjected to environmental hazards since your property was bought, the appraisal is not expected to be favorable.


In the Philippines, home appraisal is done in three ways.

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The first approach is the Cost Approach. In this approach, the value of a property is equivalent to the sum of the land value and the depreciated value of the improvements made on the land. Think of a house and lot property, for example. The value of this particular property is the land value and the physical building on the land itself. Here, the value of land is dependent on the market value in its specific area.

This method works on the assumption that the potential buyer of a property should pay a price that is equal to the cost of constructing an equivalent house. The appraisal using this method is the sum of the value of the land and site improvements on the land, less the depreciation.

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The second way is the Sales Comparison Approach, which looks at the selling prices of similar, recently sold properties and takes into consideration the time, conditions, and differences between the house being appraised and the properties it is compared with.

In the Sales Comparison approach, there are different factors that can affect the final value of a property. These factors include the date of sale, location, type of property, number of rooms, lot area, and site size. The appraised value will depend on the superiority or the inferiority of the property being compared.

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The last approach is the Income Capitalization Approach. It uses two changing factors to determine your property’s current market value. The first variable is the net operating income, which is income after all its operating expenses are paid, and the second is the capitalization rate, which is the percentage that shows a property's estimated net operating income as a percentage of its market value. The Income Capitalization Approach is generally used for commercial, industrial, and special-use properties.

Getting the most out of your property is possible with the right help. With a reputable real estate company like RE/MAX Philippines, you are assured that your property is given its best values. Check out our website, https://remax.ph/, to link with our expert brokers who can help you make the most out of your investment.


Citiglobal, Important Facts You Need to Know about Land Value and Real Estate Appraisal in the Philippines

Investopdia, What You Should Know About Home Appraisals

IVSC, Property valuation in the Philippines: Are we losing international competitiveness?

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