The process of selling a property can take several weeks or even months and it is normal that as a seller some doubts arise regarding how to define the price, position yourself in the market of interest and ensure that the process develops in the best way for both the seller and the buyer. The best tip is to hire a real estate agency, which will provide the necessary advice throughout all the stages, however there are also guides that can be very useful.

In order to have an estimate price for a property, it is important to be clear about the differences between the appraisal price, the market price and what the seller can really get for this property.

The appraisal is a report that specifies the value of a property within the market; elaborated by a qualified entity, establishes in a justified way the value of a property. The appraisal must comply with legal  and technical standards.

Methods to define the appraisal price:

  • The comparison method is the most commonly used. It consists of valuing the property by comparing it with others of the same characteristics and value in the market where the property is to be positioned.
  • The residual method calculates the value that the property will have once the construction is ready and the expenses that were needed are deducted.
  • The capitalization method is when the value of the property is calculated through all the net rents up to the appraisal date.

It is a point in which the owner maximize their profit and the buyer maximize the utility in a competitive market. The market price is a reference that indicates how much consumers are willing to pay for a property.

Ways of calculating the market price of a property

  • Review websites that are dedicated to the real estate market. You can make comparisons or know the approximate market price of a certain area. A disadvantage can be that it is an estimate and not entirely accurate.
  • Use price index calculators from sales platforms. You can make a small study by evaluating properties similar to the one you want to sell in features, rooms, services and amenities.
  • Rooms, garage and usable space: Usable space is a determining factor when establishing the final price. When a space is unfinished such as a garage or basement it is not counted in the measurement of usable square meters, but it can be counted as an amenity offered by the property.

The living space is the most appealing, because it gives more value to a property depending on the main rooms, the kitchen and bathrooms. Sometimes these are the ones that need the most renovations to maintain a modern environment.

  • Property Size: To estimate the value of a property, size is undoubtedly a fundamental element. The value of a house is usually estimated in the price per square meter, but factors such as location also have an influence in the general appraisal.
  • House Conditions: If the house is in good conditions and is only a few years old, its value will be higher. When some parts of the house are new, such as plumbing, electrification, roof and even appliances, there is less chance of breakdowns. This means savings and security for the buyer, therefor more likely to invest in a new property or a property with new features.
  • Time is also an important issue when buyers want a property they can move into as soon as possible. This also affects the price as it avoids expenses in repairs, maintenance and renovations.
  • Location, neighborhood and services: A good located property, in a quiet neighborhood and with nearby services, makes its value higher. Many families choose a property because of its proximity to their jobs and other services. However, the value of a property will be based on three indicators:
  1. The quality of services and proximity to schools and hospitals.
  2. Proximity to supermarkets, shopping, entertainment and recreational centers.
  3. Employment opportunities and businesses.

If you are a seller interested in positioning your property in the Costa Rican real estate market, the most important step is to hire a good real estate consultant to help you establish a price according to the market so that both you and a future buyer can get the best out of this transaction.