Property valuation is a process of forming an opinion of value-in-exchange under certain assumptions. Supply and demand within the property market as whole and specific submarkets will be changing all the times and therefore a valuation is a snapshot estimate of exchange price at a particular point in time. We are confident that our appraisal is accurate and reasonable based on following approaches:
Market value is the estimated amount for which a property should be exchanged on the date of valuation between a willing buyer and a willing seller in an arms-length transaction after proper marketing wherein the parties have each acted knowledgeably, prudently, and without compulsion.
- Sale Comparison Approach
Sale comparison approach is a method of estimating the value of a property in which a subject property is compared with recent sales of similar and comparable properties in the market. The basic premise of the sale comparison approach is that the market will establish a value for the subject property in the same manner that the values of comparable, competitive properties are established.
- Cost Approach
The cost approach is one of three basic valuation methods. The others are market, or sale comparison, and income. The fundamental premise of the cost approach is that a potential user of real estate won’t, or shouldn’t, pay more for a property than it would cost to build an equivalent. The cost of construction, plus land, therefore is a limit, or at least a metric, of market value. There are some fairly large assumptions embedded here. One of the basics is that there is a sufficient supply of biddable land that construction is a viable alternative to the purchase of an existing property
- Investment Approach
This approach considers the net income that a property might generate, typically in the form of rent, and this income is capitalized by using an appropriate yield at eh suitable target rate of return.