Real estate business valuation is the method of deriving a fair market value for your business. Whether you are interested in buying or selling a business, assessing its correct value should be your first priority. There are many specific factors that go into valuating a real estate business, such as the number of new developments versus the amount of existing homes being bought and sold, as well as the length of time you have had to build a reputation in the area. You can use an outside valuator to assess the fair price of a business or do it yourself. There are plenty of valuation resources offered.

Getting a business assessment is a very useful tool to help you make sound business choices now and in the future. Follow these steps to find your real estate business’ worth:

1. Make use of the tools of the trade with software to gauge your real estate business’ worth on your own time.

2. Team up with a local real estate business appraiser and profit from in-person meetings.

3. Think about using utilizing real estate market industry reports to gauge your business' worth.

Action Steps
The best contacts and resources to help you get it done

Become skilled at how to appraise a real estate business yourself

Learn how to value a business by using helpful real estate business valuation software. This can be very useful as you continue to grow your business. For example, being able to value your business can help obtain financing for opening up new offices or to set a selling price if you want to exit the business.

I recommend: National Association of Certified Valuation Analysts has a software product called Business Valuation Manager Pro that integrates data from nine different databases so you get industry accurate information for your real estate business valuation. ValuSource offers a software package that includes market data and industry composition valuation methods to ensure your report is tailored to your real estate business.

Use a local professional to purchase a real estate appraisal

Having a local business assessor has many advantages. When looking to value a real estate business, a local professional will have a better idea of regional economics, allowing you to time the sale of your business better. They will also be able to meet with you and explain the different reports and formulas that go into the valuation.

I recommend: Fair Market Valuations has locations all around the country that can guide you through the process of valuing your real estate business. Calhoun Companies has an office in MN, and they have been performing real estate business valuations throughout the upper Midwest for many years.

Utilize business reports to learn your real estate business' worth

A general economic report will show how the overall economy is faring. A real estate industry-specific report will go into much more detail regarding the performance of the sub-division you are in. This gives you all of the information you will need when you want to value a real estate business.

I recommend: Industry Eye has industry specific reports needed for a real estate business valuation, such as an industry financial data report. Infiniti Research is a good resource to find industry-specific information such as real estate market forecasting.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Many accountants have experience in real estate business valuation. If you currently have an accountant, consider asking for their services.