Many fall as victims of commercial fraud especially when investing in developed lands, this fraud occurs as a result of buyers insufficient awareness and incomplete information about the real estate market and the prevailing prices.

In order to avoid this, buyers should posses enough awareness about the right ways to evaluate a land before signing the contract so as to avoid being caught in a commercial fraud situation.

Which is why we present a guide of three simple yet essential steps that every buyer on the verge of purchasing a Property should follow to guarantee a safe and fulfilling purchase.

1- Comparing between different property prices

This way is known to be the easiest where buyers compare the selling price of the desired property with other lands on the terms of the following:-

A- Type (residential or commercial)

B- Condition (damages and repairs needed)

C- Whether or not the property is under construction (in case of vacant lands)

This method is mostly used to effectively Evaluate Developed Lands by comparing them to each other and conducting a study to the factors that might affect the property price which are as follows:-

1- Location

2- Condition and age of the property

3- Features and specifications of the property itself.

4- Services provided by the property

5- Size.

6- Quality of the interior designs and decorations styles

7- Competent authorities licenses

8- The property title deeds

Note: The same factors should be considered when assessing vacant lands

Finding exact similar properties is impossible, however, when comparing between more than one property; the comparison should mainly target the weaknesses, strengths and characteristics of each property, all of which a buyer will identify based on his needs and wants.

And for an accurate estimation of the price, a calculation of the surrounding properties prices per square meters will assist in identifying the property’s market value.

2- Assess the cost price while considering a reasonable profit

Here a buyer should resort to a professional for assistance. A realtor with expertise will probably guide you to the best deal using the following steps:-

A- Exclude any built properties and determine the price of the vacant land in the present time.

B- Identify the costs required for developing the land in real time while considering any damages to the existing property, then deduct the consumption value from the development costs.

C- Determine the current value of the property by subtracting the consumption costs from the developing costs.

D- Add the current value of the property to the price of the vacant land and you will get an estimation on the actual price of the desired investment.

3- Compare between the expected revenue and selling price

Estimating an actual market price for the desired property can be difficult especially if there are no similar properties to compare yours with.

Which is why, subtracting the value of the property’s annual income (in case its a mall, hotel or rentals) from the maintenance and operating fees will result in knowing the market value of your desired property.

The post Commercial fraud: How to evaluate Developed Lands Investments and avoid falling into the trap of real estate fraud? appeared first on Weetas Real Estate Blog, Market Stats, Real Estate Analysis.