You’re in the real estate business and very likely have been asked by a home owner "What is my house worth?" or "What price should I ask for my property?"

Tough question, right? Yes and no.

The short answer is the value of a property is what a willing buyer and a willing seller agree on. But that is not the full answer because many factors go into determining the value of a property.

Example, which of the "homes" pictured is worth more? The immediate answer is the mansion but that may not be correct answer based on where the property it exists on is located, correct? If the nipa hut is on even a small property surrounded by and stopping a proposed mega peso project it might very well be valued more even if the actual value of the structure and land is not. What is driving it's value is location, location, location.

We quickly see many, many aspects of a property determine what it "should be" valued at. The property might NOT be valued at it's highest value due to factors such as how fast the seller want's to sell, the condition of the property (if not raw land,) if the property can be used right away or additional work is needed in order to use it for the intended purpose (such as demolishing an existing structure,) and simply the subjective position of the buyer.

With all things to be considered we often turn to real estate appraisers. Educated and trained professionals who can accurately provide a selling or purchase price based on their certification and experience. Correct? Again that depends on what the education was, who provided the education, and what the experience has actually been. Example, we experienced a certified, licensed appraiser who stated there are three levels of value when considering what a residential property is worth, basically low, medium and high. Those levels roughly equated to 20-25k, 30-35k, and 40-45k per square meter. Simply put just take the square meters of you house and multiply. Simply put that would mean the highest valued house could only have a value or factor of 100% of the lowest as 40k is 100% more than 20k. This is a factor of one.

If you are a builder, knowing the cost of materials, you might take issue with that claim. Example tile can be 100 peso per square meter or 500+ peso per square meter. That is a factor of five. That makes 10,000,000 turn into 50,000,000 when comparing actual materials used not just a factor of one limiting the highest value to 20,000,000. Except for the most basic of materials like rebar, concrete, sand, and gravel actual materials grade, quality, style, and availability used play a huge part in what a house is worth and this is often overlooked. True not all components used in building a house warrant a factor of five but usually have a factor of more than one. And if a component, such as electric automatic remotely controlled gate openers exist in the house it’s not just the purchase price of the component adding to the value of the house, it’s the value of the convenience of it’s use. And the list can go on and on.

Net/net there is not a simple answer to what a house is worth if the seller is not in a hurry to sell, the house is located in a highly desirable location, the house is well maintained on a sizable lot, the house has a great floor plan/architectural design, the house has unique features, and the market is not flooded with like properties. But, as knowledgeable licensed real estate broker and agents, one can properly educate both sellers and buyers as to the variables that influence what a property is worth.