Real estate appraisal is a set of measures designed to determine the current market value of real estate objects. To assess the real estate resorted to a variety of situations, ranging from disputed processes to the division of property and ending with the analysis of the effectiveness of investment in a particular industry.
The concept of real estate is rather shaky and is based on the principle possibility of moving the object in question in space. Real estate is considered to be objects that represent land or are inherent from such. Although, often in determining the property are guided by other considerations. In every country in the world, the position of the border between movable and immovable property depends on the will of the legislature. On the territory of the Russian Federation, the list of objects that relate to real estate is enshrined in the Civil Code. Article 130 of this regulatory document states that the following property items are considered to be real estate:
WHEN IT IS NECESSARY TO EVALUATE THE PROPERTY:
Real estate appraisal may be needed in a wide variety of life situations, one way or another connected with the real estate object and ownership rights to this Sami object. Most often, real estate appraisals are used in the following situations:
Before making a transaction for the purchase or sale of real estate. Moreover, the initiator of the examination can be both the buyer and the seller of the evaluated object.
To assess the attractiveness of an enterprise before attracting new shareholders or with an additional issue of securities.
- If necessary, the redistribution of shares of ownership.
- In the process of insuring real estate.
- When forming the tax reporting.
- Before applying to the bank for a loan.
- If necessary, an independent assessment of the cadastral value of the property.
- In the execution of court decisions.
- When liquidating real property.
- In the process of resolving civil disputes regarding property rights.
- DETERMINING THE COST OF OPERATION OF BUILDINGS AND STRUCTURES
The calculation of such a cost is determined based on the area of the building and its purpose. For business centers, the class indicator is also used – class buildings “A”, “B” and so on, which are set according to the generally accepted classification. However, the difficulty in determining the cost of operating buildings and structures lies in the fact that it may vary depending on the season, features of engineering systems, building wear and so on. To determine the most effective cost of operation, which may be unreasonably high due to an ill-conceived management system, a similar type of property valuation is used.
VALUATION OF REAL ESTATE OWNED BY INDUSTRIAL ENTERPRISES, PERFORMED TO DETERMINE THE TAXABLE BASE:
Most types of real estate valuation are based on determining the market price of the object under study. However, there are a number of cases where the value is determined on the basis of a number of non-market indicators. Real estate of industrial enterprises is a specialized type of property, the utility of which is limited by the specifics of the enterprise, that is, a specific type of use. Such property is extremely rarely sold in an open market. Consequently, these properties almost have no open market for sale. On this basis, the application of valuation based on the market price for tax purposes is not acceptable. For valuation of real estate owned by industrial enterprises, use a method of determining the value, taking into account the residual cost of reimbursement.
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ESTIMATION OF THE COST OF DAMAGE CAUSED BY EXTERNAL IMPACT:
To external influences can be attributed both natural and man-made effects, as well as the impact caused by the fault of man. Such events include fires, floods, water in the event of leaks, cracks, damage to the decoration of the room, and so on. All these incidents reduce the market value of the property, so the amount of damage can be assessed by contacting a specialist in real estate valuation. There are several methods for assessing the damage caused to the property by external influence. The choice of a specific technique lies in the competence of the evaluator, and in each specific situation the appraiser uses the most efficient and suitable technology. The experience of a specialist plays an important role in this, since the choice of the correct method allows one to determine the most reliable cost of damage.
THE LEGAL FRAMEWORK FOR REAL ESTATE APPRAISAL:
Valuation activities in Russia are regulated by Federal Law No. 135-FZ of July 16, 1998. The latest amendments to this law were adopted in July 2007. The law establishes the main objects of relations arising in relation to property rights and the process of valuation. Real estate appraisers are required to strictly follow the standards approved by this regulation.
- QUESTIONS TO WHICH THE REAL ESTATE APPRAISER IS RESPONSIBLE
- What is the market value of the investigated property (apartment, land, and garage)?
- What is the indicator of NEI for this property?
- What is the cadastral value of the object under study?
- What is the technical condition of the building or structure under examination?
- What is the assessment of this object in terms of profitability?
- How can you assess this property from the point of view of the cost aspect?
- What is the cost of improvements made by the tenant at the time of the assessment?
- What is the cost of improvements made by the tenant at the time of the conclusion of the lease agreement?
- What is the cost of the investigated property, taken into account in taxation?