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Real estate appraisal procedure - do the easements influence results? (A country based approach)

This research aims to analyze the impact of easements on real estate market value and provide possible explanations for their influence in the appraisal process. It includes a questionnaire with real estate appraisers and explores how usage restrictions affect market value. The study also examines natural markers and basic environmental factors that influence property value. The research concludes that a standardized approach to accounting for restrictions is necessary and suggests further exploration of foreign experiences.

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Real estate appraisal procedure - do the easements influence results? (A country based approach)

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  1. ERES & Milan 2010 Real estate appraisal procedure - do the easements influence results?(A country based approach) Kadri Kärson, certified real estate appraiser Uus Maa Ltd Estonia Kaarel Sahk, lecturer Estonian University of Life Sciences June 2010

  2. Objective of research To analyze and underline the nature of restriction of use of real estate To concretize how do the restrictions influence the market value of real estate To draw the possible explanation of the restrictions influence during the appraisl procedure ERES & Milan 2010

  3. Engagement of research Interest of real estate appraisers – yes, very actual Attractiveness for real estate market actors, such as brokers, developers etc) Importance for real estate owners Ability to use during the academically studies ERES & Milan 2010

  4. Real estate usagerestrictions – a countrybased approach ERES & Milan 2010

  5. Questionary How it was done? Who were engaged? Number of participants Feedback Percentage of answers Questionary -12 basic questions Basically real estate appraisers 121 persons 52% 49% ERES & Milan 2010

  6. First targetRestrictions influence to the market value ERES & Milan 2010

  7. Second targetRestrictions of use don’t affect the market value Allikas: autori koostatud tabel ERES & Milan 2010

  8. Third target of researchCurrent practice of valuation process of restricted properties ERES & Milan 2010

  9. Natrual markers that work like retsrictions • Environment impact assesment methods supplemented with hedonic price model of environment goods ande services. • In this case a lot of common value variables turn into HPM components and should be analyzed trough 3-D or 4-D models • Preliminary analyze gave already some results ERES & Milan 2010

  10. Basic environment factors that have a restricting influence Roads Forets, alleys Lakes & rivers Farms Other villages Dwelling houses HV electic lines Railway Churches and chemistries In all 28 different parameters ERES & Milan 2010

  11. Always was used a standardized description of traditional one family house Some examples of 3-D pictures ERES & Milan 2010

  12. The buildings typical conditions were worked out according the basic demand requirements Some examples of 3-D pictures ERES & Milan 2010

  13. Alleys See Rive Piers Churches and chemistries +17% +20% +18% +2% +8% ???? Positive influence to value, e.g. ERES & Milan 2010

  14. Negative influence to value, e.g. ERES & Milan 2010

  15. Neutral influence to value, e.g. ERES & Milan 2010

  16. Basic results Indication of the restrictions types met during the appraisal procedure Explanation of the restrictions of use in the contest of their influence to the market value (value) Open up the employed appraiser relation to the restrictions existing ERES & Milan 2010

  17. Some conclusions The standardized approach to the restrictions accounting during the appraisal process is needed; The sales data register needs a supplement Types of restrictions Their use in the sales value formation The furtherer researches must Develop forward this preliminary research Foreign experience should be accounted ERES & Milan 2010

  18. Some conclusion Natural restrictions have a different influence to the value It is a question about the human being mind and emotions – sensitive value The further research is needed Sensitive values markers are hardly useable during the appraisal procedure ERES & Milan 2010

  19. This presentation is based on the master thesis of Mrs Kadri Karson “Usage constraints of immovable's and their influence on assessment“, supervisor Kaarel Sahk Thesis were defended in June 2009. ERES & Milan 2010

  20. Additional information • According the current presentation the empirically paper will be compiled. • The paper is in process ERES & Milan 2010

  21. The PPT and other information is available Kaarel.Sahk@emu.ee Thank You! ERES & Milan 2010

  22. Thank you! Contact adresses for further information:Kadri.Karson@uusmaa.eeKaarel.Sahk@emu.ee According the current presentation the empirically paper will be copiled. ERES & Milan 2010

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