quarta-feira, 24 de agosto de 2011

Property Valuation - Definition

In recent years elapsed urban transformations that have contributed to the Estate is considered one of the most important sectors in terms of economic, political and social.
This development led to a professionalization and specialization in the sector of real estate appraisal and their valuation techniques.
Indeed, this study aims to determine the return on investment, meaning that land to the solution designed includes the "highest and best use" given the nature of the terrain, the surrounding area in which it is inserted, the impositions of PDM, in account to determine the best investment to make in implementing urban operation.
It is intended to determine the presumed value of the transaction (PVT) of the land, taking into account its highest and best use, given the recommendations contained in the EVS - European Valuation Standards 2003: 04/04/27 - according to which: "The likely use physically and financially possible, appropriately justified and legally permitted as a result that gives the greatest value of the property assessed. "

Real estate appraisal as an indicator of market

Prior to conducting an analysis of the current market, should be made a preparatory discussion, taking into account some issues that accompany the development of spaces for housing.
Thus, for a certain consideration and analysis, factors such as location, sun exposure, traffic and parking, the quality of space for leisure, the market study, the law of supply and demand, as well as the timing to launch a product, are taken into account when making a picture or analysis of any type of property.
At the outset, there is no reason to expect that there are difficulties in putting the future of the real estate market, and this assessment were taken into account the following features:
• The evaluation of such a property (building land) does not cover all details of the negotiation and although the unit can use market indexes as a whole, its price can move away from rules of free and competitive market . For this reason, consideration shall be given a cautious stance leaving speculation to the discretion of the negotiators;
• Demographic factors presented above can be overcome and we can not predict the future so clearly. It is known that this is one area where consolidation, with good location and therefore very attractive.

Objectives of Property Valuation

The activity of real estate appraisal has, as its name indicates, the ultimate goal of determining the property value. Thus, evaluating corresponds to the act of predicting the market value of a good or service. In this case, the assessment is related to immovable property, which includes the majority of real estate projects.
Thus, given the specific case of this evaluation work, it can be stated that through even if you want to define / determine:
• Market Value of the Land;
• Constructive Potential;
• Costs of Construction;
For the particular case of an assessment of urban land, there are two methods that fall in pursuit of that goal:
• Comparative or Market Method;
• Cost Method;
The choice of assessment methods have to be linked to optical under which the owner or a prospective buyer wants to see the property assessed. For certain "situations such as" there is, respectively, suitability for different, methods of evaluation. However, even though the assessed value determined by the method or technique that best fits the case under study, should not be left to determine the value by another method, and reflect on the differences obtained.
In addition, techniques are also used for processing samples, which complement the traditional methods, namely:
• Homogenization of the sample (like real estate);
• Statistical analysis (data of the aforementioned real estate);

Applicability and validity of Property Valuation

The situations of heterogeneity of real estate transactions and the discontinuity of the subjectivity of the motivations for buying and selling also raise problems in the development of price statistics and systematic database. It is therefore important to keep in mind that the real estate appraisal, no matter how good your performance, you can not define exactly how a trader or even any individual will behave on the real estate transaction.
It is also essential to the notion that a property assessment is limited in time and specific to the property over which. It therefore seems obvious that this evaluation lacks marking time which can then transmit the value of a property, in a certain place at a certain time frame so that no changes be made in particular to leverage its findings less accurate decisions by stakeholders in this market .

Methods - General

In the assessment of real estate, is associated with a calculation methodology. This methodology is becoming more developed, so their results have an accuracy, loyalty and above all an increasing expressiveness.
In any case, the real estate appraisal is the assignment of value to fixed assets such as land, buildings or other buildings. Real estate can be evaluated according to different perspectives, sometimes obtaining different valuations for the same good, according to this perspective or purpose. Therefore, the assessment of real estate, is associated with a particular method of calculation.
The evaluation methods will be more or less effective depending on your choice for every situation, under the order or optical analysis which aims, and also the type of property, level of accuracy required and number of similar transactions made.

Evaluation methods

The evaluation methods can be classified into direct or indirect, and based primarily on values, costs and revenues.
Indirect methods are based on costs and / or income and are essentially direct comparison, the latter being considered ideal. However, the market is not sufficiently transparent, nor does the amount of similar transactions, enabling the evaluator results. The best solution often is to use both methods.
In this case, we intend to calculate the present value of urban land, located in a parish in the county of Ovar, above, in the present state.
The evaluation criteria adopted is the application of the Comparative Method and Market and Cost Method (variant Residual Value).
Then we will present the methods of analysis and calculation, as well as its assumptions and considerations, considered more relevant in the evaluation of the property being studied in this work.

Comparative or Market Method

The Comparative Method, also called direct method, synthetic or empirical comparison, requires the selective treatment of data collected on the market that integrates well. That is, based on children's well being analyzed with identical values ​​obtained on the market, in which it operates, as evidenced by transactions already completed. To this end, it is necessary that the market conditions exist that allow the comparison with the well that was assessed.
Applies this method whenever someone wants to have the property valuation with a view of the market, ie, in order, even if not immediately, purchasing or selling.
The valuation of a property by the technique of comparative value of the market is, without doubt, that means less risk and greater consensus involves. It is applied whenever you want to vacate and sell a property as-is, selling it in competition open and integrated in the local market.
This method is true enough that there is always a very active market with easy information, as is the case of the sale of units of housing, office, retail or land. However, the weighted sample by comparing the prices of different properties, as a factor that is somewhat subjective, can still lead to some distortions.
To accomplish an evaluation that's as close to reality as possible, you must acquire, to the market, the more information about these real estate. It is intended with this information, recent transactions on similar properties and comparable to the property in question, determine the amount by which the property is considered to be traded. Assuming for this, that the entities involved have no special interest in the property and there are no charges. Logically, the measure of value is the more reliable the more the market is stabilized, ie, the volume of demand and supply will be as balanced as possible. Therefore, the information to be gathered to support or support of real estate assessments must be in quantity, ie, sufficiently large to allow a credible and precise characteristics of the market, and quality, obviously, should be taken with prudence to be used properly.
This method is most used in all evaluations, requiring a thorough characterization of the well in assessment (location, area, maximum, efficient use, construction type, condition, construction quality, etc..) Or in the case of land, as in construction. You should make an exhaustive search of previous cases and, respectively, homogenization of these antecedents, in order to obtain a sample consistent with logic and homogeneous.
It is then a direct method, which allows to calculate the value of the property, be it construction or land, comparing it with those who are being traded in your neighborhood or in the market starting from the knowledge of the prevailing values ​​or the values ​​of supply, due homogenized in order to provide a sample that can be treated statistically.
We can therefore say that the market method is based primarily on local market knowledge and values ​​for properties similar to that which we are assessing if they have been trading. To use this method is essential to have a credible and representative sample in terms of transactions and / or offers for sale on the market at the time of evaluation.

Using the comparison method, in its ultimate form, begins with an exploration of data on property transactions similar to the assessment in question, following techniques are used to homogenize the sample collected, allowing properties to compare from the start and each other, have different characteristics, particularly in relation to age, condition, area, geographical location, date of transaction or trim levels and special facilities.
Finally, it is an elaborate statistical analysis of homogenates through determination of certain parameters, such as Average, fashion, the Standard Deviation, Linear Regression, Simple analysis of variance (ANOVA), confidence intervals, among others that allow one to express a value or range of most likely values ​​for the property being appraised within a given degree of confidence.
The resulting value is called a Market Value based on the recommendations of the EVS (European Standard Valuration 2003) and IVSC (International Standard Valuration Comitteé), which assumes the right to evaluate, to determine the Presumptive Amount of Transaction (PVT) and admits that the property is sold in the short term. For this case, one should take also the discretion of the Biggest and Best Value of Use, which defines the highest value for the good in question, as is recommended in the EVS-27-3-2004.
The Presumed Value of Transaction (PVT) will be determined based on market method is the allocation of gross floor area involved, the unit value of parameters that indicate the behavior of the real estate market in the area, for properties with similar or comparable taking into account the building characteristics and location. Each type of property has the value of the explanatory variables, and it is therefore essential to a detailed understanding of these variables in the study and of the property's real estate market research. The better the understanding of these variables, the easier the calculation of the criterion of market comparison. Given the usual difficulty in obtaining, in Portugal, reliable real estate information, utopia is sometimes resort to excessive mathematization of this criterion, making it sometimes necessary, supplement this criterion with the use of other criteria, and apply the because common sense.
However, the use of this method involves risks associated with the interference of subjective criteria to evaluate, account for the differences of values ​​estimated by different evaluators, and also the lack of similar transactions in goods, which can lead to an inadequate characterization of market behavior and a reasoned assessment of an unsatisfactory manner.