Value is, of course, a subjective rather than an objective term. A property might be more valuable to one person than to another, because different people may derive different utility from the same property. The forces influencing the value of a property include its environmental and physical characteristics, social standards, economic influences and political or government regulations.
The valuation methods discussed below are theoretical approaches to the question of value and help estimate the worth of a property to a buyer or seller. In practice, however, it is the free market, i.e. the forces of supply and demand, which decide what amount of money a house changes hands for.
There may be a substantial gap between subjective valuations and the fluctuations of the free market. Thus, the value of a property does not always correspond to its price. The forces of supply and demand cannot be predicted reliably. Every property valuation can only ever be a guideline to what the house might change hands for.
The Methods
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