Bahamas real estate appraisals: What you need to know

As a real estate appraiser of over 40 years, I'm questioned from time to time about my Bahamas real estate valuations.
When this happens, the owner invariably feels his home or property in the Bahamas is worth more.
Owners often attach an inflated value on their home. And why shouldn't they? After all, this is their haven; the place of many happy gatherings and memories.
But in the world of real estate, values in the Bahamas, as elsewhere, are based on a myriad of factors - not one of them tied to emotion.
Let's look carefully at the process.
The location in the Bahamas, number of bedrooms and bathrooms, square footage and overall condition of the home will all come into play, along with any defects.
Defects may include outdated plumbing, a worn kitchen or environmental issues, such as noise.
Neighbouring homes in disrepair can drag your property's value down by as much as 20 percent. The present economic conditions come into play, the number of properties on the market, etc.
The appraiser will compare your home to those that have recently sold in your neighbourhood.
When comparing against similar Bahamas properties, it's not just the final price that counts. Appraisers may also factor in any "incentives" offered (when known), such as renovations to be completed before the home goes on the market. Their appraisal will show the value of the property before and after the renovations.
Perhaps the most important factor that lenders review in an appraisal is the closing dates of the "comparables" (other homes in the Bahamas by which yours is measured). However, be warned that when markets change, today's sale price may be completely irrelevant tomorrow.
If you're planning to sell, express your concerns about the appraisal process to your Bahamas Real Estate Association appraiser, who will offer explanations and suggestions for improving your report's results.
Comments or questions? E-mail me at ask@ColdwellBankerBahamas.com.

Tip of the Week - It's important to keep your own home in good repair. It's not cheap to maintain a house, but the value can decline greatly if you allow it to get run down.

Mike Lightbourn is president of Coldwell Banker Lightbourn Realty.