BUYING PROPERTY IN PORTUGAL: COMPARING PRICES
You are thinking about buying property in Portugal but before anything else you should examine the different options and offers in an efficient and coherent way. There are various different ways of comparing the value of the property you will have selected so you can be sure that they are not overvalued.
Amongst these methods evaluation by comparison is probably the most appropriate. In the following paragraphs we will explain what this method is and how to use it... We will also give some remarks and advice, in particularly regarding particular cases that you may come across during your analysis of the property market.
Evaluation by comparison
Directly based on the real values of sales, the comparison method is without a doubt of one of the best. Indeed for your property purchase in Portugal you should evaluate the value of your intended purchase by referring to the fare charged in similar or even identical purchases
In order to do so you should, like most experts, carry out an analysis of the market with the aim of identifying the property sales that will help you make your decision.
How this method works
So in order to judge the value of a house or apartment before going ahead with your purchase in Portugal, let’s take a look at the elements that should be considered for a good analysis.
Three elements will come into play:
● Researching sales of properties of the same or similar nature: this involves taking different criteria into account. They will be linked to the type of property and state of the market, knowing what kind of property it is (house, apartment, living area), the geographic location (which will be clearly defined, a district of Lisbon for example), and the period of researching sold property , which should not be too extended in order to take market developments into account..
● Selecting terms of reference: it is important the properties being compared truly are comparable. For example if you chose to compare two hotels, one of which has been completely renovated and come with all mod cons and one that is not so geared up and is in need of renovation , then you would not be able to get a coherent result.. Thus as part of your analysis you only need to examine the most relevant sales, that is to say those with the most points in common with the property that you are looking at. Looking at the exact characteristics of a property is crucial.
●Analysing declared prices: two options are possible.
- Direct comparison: these means working out the value of your chosen property and the declared prices. It is used if the similarity between the desired properties within the terms of reference and those being assessed is sufficient or if the overall prices has any particular economic significance ((value of the lot for building plots in the same housing development for example).
- Indirect comparison: this means choosing a unit of measurement adapted to the type of property and reducing the declared prices into units of value. Units used for buildings include living space or surface area per m2.
In the context of your property purchase the objective of this last analysis strategy is to find the most appropriate base unit of measurement.
Where you might have the most difficult in carrying out a comparison to evaluate your next property purchase is in the case of harder to come by property. Indeed in this case you will have even more trouble finding comparisons relating to the data categories mentioned previously.
In this case you will have to widen your geographic zone and your time frame. On the other hand you will have to focus on the properties that have the most in common as possible, in order to obtain a coherent result.
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