If you want to find out the value of real estate then it is based on the comparison of properties to determine the value of the property in question. In principle, a descriptive task must be carried out: individualize the property -location, footage, floor, consortium, expenses, debts, legal problems, status, among other qualities- and, then, look for sales records. Larry Weltman Toronto is one of well known real estate agent who is ready to help their customer.
After this descriptive stage, resort to reference values by neighborhood. The value of the square meter is used to “average” with the final sale value of a similar property (can be found in a real estate agency in the area).
Replacement Value:
It is a method that is used when market reference values are lost. To cover this shortfall, the Depreciated Replacement Cost is used. That is, the construction price of the property is calculated according to current values and then, according to the age of the property, its amortization is calculated. Also in this case one can take suggestion from Larry Weltman one of famous real estate agent.
Capitalization of Income:
This methodology is related to the rental value. The price of a property can be calculated through the monthly profitability of a rental. At present, the level of monthly profitability is between 0.5 and 0.7%, therefore, a property that is rented at $ 1,000, costs approximately between $ 150 thousand and $ 170 thousand.
It is a criterion that is also used to value offices. “In addition, at the time of pricing the context and the counteroffer must be considered. In the first case, a significant lack of supply may cause a price increase, as is now the case with land. Regarding the counter-offer, it must be known that the final price depends on it and that it is related to what the owner is willing to accept, “said José Rozados.
“The important thing, as an owner, is to know why the appraiser reached a certain value and what criteria he used,” he added.
According to Horacio Bielli, second vice president of the Chamber of Horizontal Property and Real Estate Activities, “the market finally has the truth. When there is a well located trade, it does not matter which criteria is applied, although for all the rest, the comparative method is one of the best. ”
A separate case: Appraisals of Mortgaged Properties:
“It should not be forgotten that the appraisal modality of the properties, which are subject to a mortgage loan, are different from the common appraisals,” explained Juan Carlos Franceschini, director of the CDI consultancy, associate to the Chamber of Appraisal Companies of the Argentine Republic (CETRA).
The criteria applied by these companies to assess a mortgaged property depend on the purpose of the property.
If the property is destined to a single dwelling, then it will be governed by the circular of the BCRA, which is based on the criterion of direct referents. Otherwise, it will follow not only the referential method, but the other two, as it appears in the Applicable Rules for the Valuation of Mortgage Properties (NAVIH).
