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Comparative Property Valuation: Practical Methods for Real Estate Assessment

Explore the comparative approach to property valuation principles, methods, and techniques using examples and calculations. Learn to determine the value of real estate with nearly no differences using direct and indirect comparisons.

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Comparative Property Valuation: Practical Methods for Real Estate Assessment

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  1. TheComparativeApproach Ing. David Slavata, Ph.D. PropertyValuation

  2. Principle • Itisnecessary to haveat least tworealestateswithnearly no differences (flat A, flat B) • Flat A (valuated) theunknownprice, theotherespeciallytechnical and legalparametres are known • Flat B (comaprative) knownprice, knowntechnical and legalparameters

  3. Methods • Direct comparative • Professional balance sheet • Usingthe direct increases and reductions • Usingthecoefficients • Direct with no representative • Undirectwithrepresentativeestate

  4. Example Valuatemultiflat house in thevillageof Svatoňovice by comparativeapproach. Builtfrombricks, insulated. In the house there are 4 similarflats 2+1. Appartement area 57m2. No balcony. Use thecomapartivemethodes. Theyearofconstruction: 1963.

  5. Theadvertising database

  6. Professional balance sheetmethode CV1 = 1/n x SUM SPi

  7. ComparativeValue

  8. Advantages and disadvantages • Simplemethode • Assumptionofhigh homogenity offlats • Timeliness • Sample ofusage: Flatsfor instance

  9. Methodeofcomparison, 1.Direct. Usingofincreases and reductionsduethediferencesbetweenvaluated and comparableflats. 2. Usingthecoefficients express ofdifferences.

  10. Direct methodeusingincreases and reductions CV2a = [(SPA +/- sum IRAi) x W1 + (SPB +/-sumIRBi) x W2 +….+(SPX +/- sum IRXi) x Wz] / W1 + W2+ … + Wz

  11. Advertising database

  12. Calculation CV = (+390 x 0,85 + 50 +0 + 39 +650 x 0,85 – 100 – 50 – 50 +580 x 0,85 - 100 + 0 – 50) / 3 CV = Kč/flat

  13. Usingthecoefficients express ofdifferences CV2b = sum ISPCi / n ISPCi = SPi / Idi Idi = k1 x k2 x k3 x…..x kn

  14. Procedure • To getthe database withthecomparativefltas as homogenuos as possible. • Thebidpricesofflatsshouldbecorrected by thereductioncoefficient. • Selectionofsignsofdifferencesshouldbe set thecoefficientsofdifferences (k) • By multiplicatingofcoefficientswegettheIndexesofdifferencesforeachcomparativeflat. • Thesellingpriceshouldbedevided by the Index ofdifferenceforeachflat. • By theaverageofadaptedsellingpriceswegetthecomparativevalueofthetheflat.

  15. Sestavení databáze

  16. Creationofcoefficients K1……….. Rooms K2……….. Locality K3………. Technicalcondition

  17. Valueofcoefficients K1: 2+1…….. 1,00 3+1……… 1,12 K2: Svatoňovice. 1,00 Vítkov…….. 1,12 Sádek……… 0,90 K3 Standard… 1,00 -…………… 0,90 +………… 1,1

  18. Calculation

  19. Děkuji za pozornost

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