Real estate is in free civil circulation and is the object of various transactions, which gives rise to the need to assess its value, i.e. in determining the monetary equivalent of various types of real estate at a particular point in time.
All types of real estate value can be divided into two large subspecies:
Exchange cost- used when buying, selling, leasing, pledging, that is, in the real estate market.
Market price— the most probable price at which this object can be alienated for open market in a competitive environment, when the parties to the transaction have all the necessary information, and the value of the transaction does not reflect any extraordinary circumstances.
Insurance value- price full refund damage to property in the event of an insured event.
Liquidation value- the cost of the appraised object in case the appraised object must be alienated within a period less than the usual exposition period for similar objects.
Cost in use- expresses the value of the object for the owner, who is not going to sell it. It is necessary for comparison with alternative investment options, comparison with cost estimates for the creation of similar facilities and other purposes.
Investment cost- the value of the object of assessment, determined on the basis of its profitability for a particular person with given investment goals.
The investment cost calculation is based on subjective assessment discounted costs and investor income expected from the use of this property in a promising investment project.
Cadastral value- the value of the object of assessment, determined by the methods of mass assessment in accordance with the provisions of regulatory legal acts on cadastral valuation.
Taxable value- the cost of the object of assessment, determined for the calculation tax base and calculated in accordance with the provisions of regulatory legal acts.
replacement cost- the amount of costs for the creation of an object similar to the object of assessment, in market prices that exist on the date of the assessment, taking into account the depreciation of the object of assessment.
Bulk evaluation real estate is an assessment of a large number of real estate objects on a specific date using standard methods statistical analysis. This unifies the procedure for evaluating a large number of objects.
Individual assessment real estate is an assessment of a specific object on a specific date.
1. Problem definition:
2. Preliminary inspection and evaluation plan:
3. Collection and verification of data:
4. Application of assessment approaches:
5. Coordination of the assessment result:
Obtaining a final property valuation based on the results of applying various approaches to valuation. Taking into account all significant parameters, based on the expert opinion of the appraiser, the final value of the value of the object is established.
6. Final stage
An appraisal report is being drawn up - a document containing the rationale for the appraiser's opinion on the value of the property.
The comparative approach to valuation is a set of valuation methods based on comparing the objects of valuation with its analogues, in respect of which there is information about the prices of transactions with them.
Conditions for applying the comparative approach:
Advantages comparative approach:
Flaws approach:
The cost approach to real estate valuation is a set of valuation methods based on determining the costs necessary to restore or replace the object of valuation, taking into account accumulated depreciation.
It is based on the assumption that the buyer will not pay more for the finished object than for the creation of an object of similar value.
Advantages cost approach
Flaws approach:
The income approach is based on the fact that the value of real estate in which capital is invested must correspond to the current assessment of the quality and quantity of income that this property is capable of generating.
The main prerequisite for calculating the value of this approach is the lease of the property.
Market valuation- this is an assessment of the market value of property, as well as other objects civil rights for which the legislation Russian Federation the possibility of their participation in civil circulation has been established.
Market valuation establishes the most probable market value at which this object can be alienated on the open market in a competitive environment, when the parties to the transaction act reasonably, having all the necessary information, and any extraordinary circumstances are not reflected in the value of the transaction, i.e. market value estimate needed when:
In relation to those whose market value you want to know. It can be absolutely any items of movable and not movable property. Among the most requested services of our company
The most demanded market valuation of real estate.
Market price real estate and its calculation is the most common type of market valuation. Market value appraisal includes determining the value of an object or individual rights in relation to the object being valued, for example, lease rights, rights of use, etc. Often, the market value of a property is obvious to its owners or potential buyers. However, after this procedure, its price can be significantly adjusted. To determine this real value, a market valuation of real estate is carried out.
Estimating the market value helps to maximize the profitability of managing real estate, this new resource that businesses and citizens have at their disposal. Market valuation becomes necessary already when the owners of land and real estate want to mortgage them for a loan. Without a proper market assessment, one should not count on attracting additional investments, including foreign ones.
Valuation of the market value of real estate means determining the most probable price that will result from the sale of a property in a competitive and open market, given all the conditions necessary for a fair transaction.
There are three main methods of market valuation of real estate objects: the comparison method, the cost method and the income capitalization method.
The main method of market valuation is the method of comparative sales. This method is applicable when there is a market for land and real estate, there are real sales, when it is the market that forms prices, and the task of appraisers is to analyze this market, compare similar sales and thus obtain the market value of the property being valued. The method is based on a comparison of the object offered for sale with market analogues. It finds the greatest use in the West (90 percent of cases). However, this work requires an already established market for land and real estate.
The method of estimating the market value by costs is practically not applicable to land. It can be used only in exceptional cases of valuation of the land inseparably from the improvements made on it. It is believed that land is permanent and not expendable, and the cost method is used to evaluate man-made objects. When assessed by this method, the value of land is added to the cost of improvements (buildings, structures), and the land is valued separately by other methods.
Generally speaking, the market value of land is determined by how much income can be obtained from its use. Due to the limited availability of the best to use land plots, for example, in cities, there is a corresponding shortage and calculation of the cost of land. The next method of market valuation, which is applicable specifically for Russia, is the valuation method based on the analysis of the most effective use real estate, and this analysis is related to determining the type of use that will bring the owner the maximum income.
Naturally, banks showed great interest in such operations. And all of them need a qualified and accurate market valuation of real estate, carrying out insurance at the real value of real estate.
Market valuation is also needed within the framework of the regional tax policy. Worldwide, the basis of the local tax system is the property tax, due to this tax forms about 70 percent of the local budget. Of course, with the development of the market itself, with the appearance of real values, it is possible to switch to a taxation system that would stimulate the development of the real estate market and at the same time ensure replenishment local budgets. This also explains the unconditional interest in market valuation shown by local administrations.
The cost of professional market valuation services varies greatly depending on the types of objects being valued, the complexity of the work and, of course, on which specialists are involved in the valuation. Typically, the cost of services is measured either in hours multiplied by the hourly rate, or depends on the size of the object, but is never tied to its cost.
The specialists of our valuation company have rich practical experience and proven methods of market valuation of real estate and movable property, calculation of the market value of property, which allows us to effectively solve problems related to the market valuation of any type of assets, regardless of their number and location.
If you need to get a market appraisal of the value of any property, please contact us using the contact information. Call us, we will help!
Why in modern world assessing the market value of the property? In what cases is it needed? Who and how can carry out evaluation work? What should be the report on determining the price of the apartment? Let's consider the topic in detail.
Appraisal activity is regulated by legislative acts, valuation standards, Civil, Land and Tax Codes. The base for appraisers is the law "On appraisal activities in the Russian Federation" No. 135-FZ of July 29, 1998.
This is a process during which, on the instructions and for the purposes of the customer, an assessment of his property rights is carried out. This is the determination of the market value of real estate, lease or other rights to the property being valued.
You can evaluate:
Only an individual who has received a qualification certificate valid for 3 years after its issuance can become an appraiser. The appraiser must then pass a "re-examination".
A legal entity has the right to evaluate only if there is an employment contract with at least two appraisers-individuals.
Appraisers must be members of a self-regulatory organization and are required to insure their professional liability. The sum insured for an appraiser is from 300 thousand rubles, for an appraisal organization - from 5 million rubles.
Conclusions made by a specialist during the analysis possible price object, are used:
In these cases, the appraiser establishes the market value of the property on the date of appraisal.
The most frequently appraised object is an apartment. Let's analyze the process of determining its market value.
The market price is the value of an apartment for which it can be sold on the free market, in a competitive environment, without the influence of extraordinary factors, provided that information about the sale is publicly available.
The beginning of the process is a meeting of the customer with the contractor. The customer must answer the question why you need to evaluate the object. This information will be needed by the evaluator to select the most appropriate approaches, methods, criteria, and sources of information.
At the first meeting of the appraiser with the customer, the following are discussed:
The appraiser presents documents confirming the right to engage in appraisal activities.
When all conditions are agreed, the parties sign a contract for the provision of services.
The term of performance of work is 2-6 business days after the submission of the necessary documents to the appraiser.
These include:
The cost of services depending on the region is from 3000 rubles. up to 10,000 rubles, but it is much higher for "elite" apartments.
The customer provides the appraiser with the opportunity to inspect the apartment at the agreed time. Executor:
The appraiser takes a photo of the premises of the apartment, staircase, entrance, house, yard. It notes the presence of infrastructure facilities, and also visually evaluates all factors affecting the cost.
This is the name of the work carried out by the contractor at the workplace. The appraiser analyzes the collected information, selects approaches to assessing the value of an apartment, determines the sources of information, studies statistical data, makes calculations, justifies the market value, coordinates the results of different approaches and generates an appraisal report.
Three approaches are used to determine the market value of an apartment:
The assessment of the market value of apartments in 90% of cases is carried out using a comparative approach by comparing sales. When determining the price of an apartment, this method is extremely accurate.
In the course of determining the price, an analysis of the number of offers and actually conducted transactions is carried out. In addition to the object itself, the area is studied in detail, the dynamics of prices for 1 sq.m. housing in houses of different series, infrastructure, negative environment, development prospects (for example, metro), etc.
Where more than one approach is possible, the market value is established by reconciling the value determined using the different approaches.
The result obtained must be drawn up and presented to the customer in the form of a Report on the appraisal of the market value of the apartment.
If the customer needs the market value of the apartment just “for himself” in order to know how much it can be sold for, then the result can be provided in the form of a certificate. The cost of such an assessment is many times lower.
A full report contains information about the customer and the appraiser, information about the appraised apartment, analysis of its characteristics, description of the applied approaches and methods of appraisal and the market situation, actual calculations and conclusions about the value of the object.
The report contains the statutory sections following each other in the following order.
The front side of the report contains:
This letter is included in the report. It says:
The section contains general information about the apartment, the results of the assessment with different approaches and the final value of the market value of the apartment.
The section contains:
Here, the appraiser confirms that he has professional skills for real estate appraisal, the reliability of the facts set out in the report, lists the regulatory and legislative framework in accordance with which the appraisal was carried out, etc.
The appraiser should emphasize the lack of personal interest in the results of the price determination.
Given short description stages of the assessment.
About the customer - individual indicate: full name, passport details, TIN, address and contact details.
The appraiser states:
If the appraiser works in an organization, the organization with registration data (address, TIN, PSRN, etc.) and the position held in it are indicated.
The section lists regulations, valuation standards in accordance with which the valuation was carried out. The concept of market value and the cases in which it can be used are defined.
The section describes the process of assessing an object with different approaches: what information is used in each approach, its sources, how the data is processed and the principles of calculations.
This is an analytical section that includes several subsections:
Analysis of all three approaches and selection of one or more approaches that will be applied to determine the value of the appraised apartment.
Since a comparative approach is used when evaluating apartments, the section provides a description of it, sources of information, a list of real comparable offers. You can compare the cost of apartments by a combination of parameters:
When comparing, the time factor is very important, that is, offers for the sale of apartments in the same time period are subject to comparison.
After the analysis, a conclusion is given on the market value of the apartment as of the date of valuation.
The conclusion is dated and signed by the appraiser.
The final section of the report is a list of applications and the attached documents themselves.
The composition of the attached documents:
The report is completed, the sheets of the report are numbered and stitched. The report is ready for delivery to the customer.
Calculations can be made both with an advance payment at the signing of the contract, and without it.
After submitting the report to the customer, the latter must make payment in accordance with the terms of the contract and on the basis of the certificate of services rendered signed by the parties.
If the customer agrees with the results of the assessment of the market value of the apartment, the report can be used by him for the purposes stated in the assignment for the assessment.
For a professional assessment, you should contact a specialist who has been working in this field for a long time. The solution of the issue for the solution of which it was produced will depend on the quality of his work. Credit organizations recommend accredited appraisers whose knowledge and professionalism they trust.
The concept of real estate includes objects such as land, buildings, structures. In a word, everything that is inextricably linked with the earth.
In appraisal practice, it is customary to divide this object into residential and commercial. Everything that can be rented out, used for commercial purposes can be attributed to the second group, it is also called profitable real estate.
We provide appraiser services for both types of real estate. Read more: Commercial real estate appraisal , Apartment appraisal , House appraisal
The main factor that affects all real estate is location.
This is especially evident when evaluating apartments: at a distance from the Moscow Ring Road, the cost is significantly reduced.
Other factors that can have a significant impact include the following:
The shortest possible time independent evaluation
Top quality independent evaluation
Individual approach in assessing each case
Included Appraiser's departure / preparation of the report / delivery of the report to the metro
*500 rub. Moscow region
Step-by-step instructions for ordering a service
The report is valid for 6 months.
Evaluation activity is regulated by documents:
1.FZ 135 on valuation activities
2.FSO 1 general concepts
3.FSO 2 Assessment objectives
4.FSO 3 Requirements
5.FSO 7 Real estate appraisal
6.FSO 8 Business Valuation
7.FSO 9 Valuation for collateral
8.FSO 10 Assessment of machines
9. FSO 11 Assessment of intangible assets
10.FSO 12 Liquidation
The market value of real estate is the value on the free market. competitive market where no external and internal factors are able to influence it.
What is the difference between liquidation and market?
The liquidation differs from the market in that the object is alienated on the free market with a reduced exposition period.
The most common method in real estate appraisal is the comparative approach. This approach is based on the method of comparing sales: analogues are selected, adjustments are made, and as a result, the market value of real estate is obtained.
For profitable real estate In addition to the comparative approach, an important role is played by income approach: rental rates are analyzed, and it is possible for this object to generate cash flows.
Often, citizens of our country have to contact appraisers to determine the market value of their property. This is largely due to the sale, to confirm the reality of the required price for its purchase. But few of them know what it is at all. What methods do they use? Are there features or not?
The definition of "market value" means the estimated cost of the property being valued, depending on compliance with market principles.
We can say that the market price of real estate refers to the sale cost at which the property being valued is sold under certain conditions, namely:
When assessing the market value of real estate, appraisers use, namely:
Let's consider each in more detail.
implies that the potential buyer is reasonable and will not purchase a property for a greater cost than it will be necessary for him to independently raise a similar one for the period of time necessary for him.
The most truthful coefficients here will be provided for:
It should be borne in mind that the coefficient itself will be slightly lowered when determining the cost of physically worn out or banally obsolete objects.
There is one caveat: when evaluating land in this way, real estate objects that are located on the site are not taken into account (they are separately evaluated).
From the name of the method itself, it can be understood that the assessment is carried out by comparing similar transactions with other similar properties.
The appraiser himself is based on the fact that the buyer is smart and will not overpay a higher price than it really is.
The calculation itself is carried out by dividing real estate into elements that, in without fail will be taken into account in price analysis.
For example, when assessing the value of an apartment, the following is taken into account:
Based on the results of the analysis of such transactions, an assessment of its value will be made.
It should be noted that the popularity of this method on Russian market decreases. This is largely due to the shadow politics of the real ones.
This method is based on the thesis that the property being sold must necessarily pay for itself with the profit received from its use in a limited period (determined by the seller himself).
For example, a recently purchased property has one goal - exclusively. Here you need to determine what kind of profit you can take from this to the maximum.
Suppose it turns out that renting out is unprofitable - maybe the best option would be to live in it? But here again - the reliability of the assessment may be biased due to the shadow marketing policy. It is difficult to find out the rental cost, and if you need to calculate for the future, it is simply unrealistic.
This is only possible if:
Otherwise, we can talk about insufficiently reliable information that was obtained after the assessment procedure.
Depending on which property is being assessed, there are also features.
For residential property key point is:
At the same time, the characteristics of the property itself and the building are taken into account.
When evaluating an apartment:
Characteristics of the house itself:
Location:
For commercial premises:
For office space:
For :
When assessing the value of a residential building, the following is taken into account:
Paying attention to all the features, a general picture of the object is formed, and then a decision is made on the cost.
As you can see, in the process of evaluating a property, various methods are used, and it is not possible to say which one is better. First of all, it depends on regional characteristics.
How to determine the market value of an apartment for its further sale? Irina Aleshina, director of the Tvoy Dom Real Estate Agency, tells about the assessment procedure and possible errors.
