Dhawan Associates
IBBI Registered Property Valuer
What is a property valuation
A property valuation is a type of report that outlines the assets a property has and potential elements that could affect the value of the property. Assets include things like the square footage, bedrooms, bathrooms, kitchen amenities, backyard amenities and proximity to well-known locations.
The valuation of real estate is central tenet for all businesses. Land and property are factors of production and, as with any other asset, the value of the land flows from the use to which it is put,and that in turn, is dependent upon the demand (and supply) for the product that is produced. Valuation, in its simplest form is the determination of amount for which the property will transact on a particular date.
The objective of this paper is to provide a brief overview of the methods that used in real estate valuation with a particular emphasis on the valuation of specialised property.Specialised Properties are properties that are more heterogeneous than homogonous. That is, the nature of the property is such that the type of property concerned don’t transact sufficiently to be able to determine value by comparison of previous sales. In such circumstances the valuer needs to resort to a valuation model that addresses the underlying fundamentals of that property so that its value can be determined by reference to the wealth producing qualities of the asset.
The valuer looks at each property individually, beginning with an objective inspection of the interior and exterior of the home or building, as well as driving through the surrounding neighbourhood. The valuer looks for the assets, as well as the detriments, of the property. For homes, gross living space, quality of construction, location, layout, the number of bedrooms and bathrooms, the lot size, condition of the home and land, heating, landscaping, decks, fencing, recent renovations, amenities provided by the surrounding neighbourhood, are all considered by the valuer.Living space is calculated by measuring the outside of the home. It does not include such areas as the garage, porches, sheds, and so on. Basements are generally calculated separately from the living space. The contributory value of basements is determined by the local market, local regulations, if it is finished or not (and the quality of the finish), and so on.
