By: Asif Shahzad

How to determine the value of a condo

Tags: how to price a condo, condo price, how to determine a condo value, how much my condo worth, price of my Condos,

There are 3 main Fundamental ways of valuing a Property. 

1. The Direct comparison approach 
2. The Cost approach
3. The Income approach

The most acceptable way of determining the value of a condo is the Direct comparison approach. This method is used and accepted by most of the lenders, buyers,  we Realtors also use the same approach in our CMA ( Comparative Market Analysis) to determine the value of a property. 

The cost approach is widely used by the professional appraisers. 
The Income mostly used in the commercial properties with the cap rate. 

But as a Realtor, We also
 use the income approach for my investor clients when they are looking to invest in condo Real Estate market. I always see what will be the ROI (Return on investment).

1. Supply and Demand 
Supply and demand play a huge role determining the value of any property, This supply and demand cycle drives the real estate market and it creates the huge impact in the North American real estate value cycle. 
2. Price per Sq Feet
It is very important to establish the per sq ft cost of the condo unit, to establish the per sq ft cost of the condo unit other buildings in the area should be taken into the consideration. The general perception or rule about bigger sq ft condos is, as the bigger the condominium, the lower the cost per square foot (as the condo gets bigger, each square foot becomes less valuable as there are more of them)