How Estate Agents Determine Property Prices?

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Since covid-19 pandemic in Pakistan is breathing its last. Thanks to the almighty, its terrific impacts on job and business market have started depleting. Therefore, this is a high time for any homeowner to sell their property in the market, and chances are bright that they may get a good amount against it. But, before doing so you should definitely know how realtors determine the price of property, or what are the factors that influence the determining of house value? Also, there will be few tips and tricks to find a fair market value of your house, keep reading through the lines to know this whole process of determining property value by real estate agents.

There are various factors that drive the pricing system of the property in any region. During normal circumstances within a region, when there is enough of balance between demand and supply of the commodities, it becomes a lot more easy for the estate agents to determine the prices of a property. However, factors like increased demand in the market, forced auctions, or government announcement of developing the area, may affect the prices of property.

Like a few years back land prices in Gandhara, Islamabad were so meager that one could get a plethora of land by spending less than a million bucks. But now, after the New Islamabad International Airport has started its operation and M1 (Motorway) has also given segregated interchange to the area, property prices witnessed a great boom. Let’s list various factors that influence the estate agents in determining property prices in a region.

Availability of Property

Few areas are so densely populated and everyone wants to get accommodation or business opportunities there, while others have a wide availability of land in the region and you’ll see uncovered barren land for KMs. This is the first factor that determines the value of property. Like, in satellite town, Rawalpindi and Gulberg, Lahore you cannot find a listed property so easily thus the rates will be high. A 10 Marla plot in that area may cost you from 1 to 1.25 Million under normal circumstances. But, if you go for a same plot size in Bahria Town, phase 8, Rawalpindi or Valencia Town Lahore, it won’t cost more than 0.65 Million.

Valuation on Resource Availability

The second factor that influences this process is enough supply of basic needs in that particular region. Real estate agents know the availability of water, gas, electricity in that particular area and determine the price of the house accordingly. Areas with adequate supply of all these basic needs, or preferably societies that are self-sufficient in meeting the demands have higher prices. Whereas areas that face the shortage every now and then don’t have a good reputation and house values are comparatively lower.

Owner’s Price Input

Owners are so well-aware these days that they keep an eye on any new property listing nearby. Thus, they do have an idea of how market is working and are well-informed about the current pricing policy of the society. That’s why owner’s input is always listened to carefully. However, sometimes a foolish price is raised by the homeowner, which cannot be accepted on their terms. Therefore, the negotiation and market research are the tools to dissolve such conflicts.

Forced Auction by Bank or Lender

Houses that are constructed by taking loan from the banks or any private lender are sold when the receiving party fails to pay installments on time. The lender only has concern with the equity and is quite willing to sell it as low as the prices meet their equity. That’s the reason, these houses are sold in cheap prices, and not only this they also influence the local market value of property greatly.


Selling houses is never an easy job and requires a great stamina to do so. The toughest thing in the whole process is determining the value of property by the estate agent. We have dedicated this post to all the homeowners to read through this and get the fair market value of their house. A simple formula that applies here is,

Cost of the land + Cost of construction (Grey structure and Finishing) + Due Capital Gains

You can know all these costs in our previous posts. We tried to keep this article as elaborative as it could be. However, if you have any questions, feel free to leave a comment here, our real estate experts will surely help you in any regard.

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