Property valuation report. How to prepare a report on the market value of an apartment

Evaluation report- this is a written document that meets all the requirements of professional ethics, clearly and accessiblely reflects the progress of the assessment process and contains the initial data used by the appraiser, their analysis, conclusions and the final value of the value.

The appendix to the assessment report contains all photographs, sketches and maps not included in the main sections of the report. Sometimes a glossary of terms is included in the appendix.

The report, in addition to limiting conditions, may contain assumptions - statements made by the appraiser during the assessment process based on his professional opinion, but not supported by factual data.

Let's consider the basic requirements for the content of the appraisal report and a case study on the appraisal of a real estate property.

The assessment report on the subject of assessment must be drawn up in writing and submitted to the customer in a timely manner. The report must not be ambiguous or misleading. If it is not the market value that is determined, but other types of value, the criteria for establishing the result of the evaluation and the reasons for deviation from the possibility of determining the market value of the object of evaluation must be indicated.

According to Art. 11 of the Law “On Valuation Activities in the Russian Federation”, the valuation report indicates:

    date of preparation and serial number of the report;

    the basis for the appraiser’s assessment of the appraisal object;

    legal address of the appraiser and information about the license issued to him to carry out appraisal activities for this type of property;

    an accurate description of the valuation object, and in relation to the valuation object belonging to a legal entity,

    details of the legal entity and the book value of this valuation object;

    valuation standards for determining the appropriate type of value of the valuation object, justification for their use when assessing this valuation object, a list of data used in the assessment of the valuation object, indicating the sources of their receipt, as well as assumptions adopted when assessing the valuation object;

    the sequence of determining the value of the valuation object and its final value, as well as the restrictions and limits of application of the result obtained;

    date of determination of the value of the valuation object;

    a list of documents used by the appraiser and establishing the quantitative and qualitative characteristics of the appraisal object.

The report may also contain other information that, in the opinion of the appraiser, is very important for the completeness of the reflection of the method used by him for calculating the value of a particular appraisal object.

The report is personally signed by the appraiser and certified with a seal.

If there is a dispute about the reliability of the market value or other value of the valuation object established in the report, this dispute is subject to consideration by the court. An example of a real estate appraisal report is given in Appendix B.

Chapter 6. Peculiarities of valuation of various real estate objects

6.1. Land valuation

As a means of production, land has features that have a direct impact on real estate valuation:

    land is not the result of previous labor;

    spatially limited;

    irreplaceable by other means of production;

    has location constancy;

    wear-free when used correctly;

    geographically of different quality;

    characterized by the specific utility of each specific land plot;

    has fertility and all its beneficial qualities are most effectively used in agriculture;

    in almost all spheres of human activity (except for agriculture and forestry) it acts mainly as a spatial operational basis, therefore it is inextricably linked with the objects located on it: buildings, structures, roads, reclamation structures, other material elements created by human labor, so called improvements.

When valuing real estate, it is considered that the land has value, and the rest is improvements, they add to the value.

Land plot - part of the earth's territory that is equipped and ready for use for various purposes.

Improvements carried out to create the site:

    external: construction of streets, sidewalks, drainage and utility networks;

    internal: planning, landscaping, paving, installation of outlets for connecting utility networks, communication lines, etc.

A typical property consists of a land plot and buildings and there is a need to determine the value of the land plot separately from the improvements available on it, which is caused by the following reasons:

    differences in taxation of land and buildings (property tax and land tax);

    a separate assessment of the land plot from improvements is required when applying the cost method of determining the value of real estate;

    making decisions on the demolition of existing improvements in order to make the best and most efficient use of the land.

When assessing a land plot, it is necessary to take into account the set of rights associated with it. Common rights that require assessment:

1) full right of ownership - the ability to use a plot free of tenants in any legal way;

2) lease right - the possibility of owning a land plot under a lease agreement.

In Russia, most land is not sold, but leased, so appraisers often determine not the value of a land plot, but the value of its lease rights.

Cost of rental rights - This is the amount that a potential buyer is willing to pay for the right to own a given site under a lease agreement in order to obtain benefits from this ownership. Valuation of lease rights is used when determining the sale price of the right to lease a land plot, when determining the value of the object of which the leased land plot is a part, and when assessing damage from termination of the lease agreement.

The introduction of the Land Code is aimed at developing the land market. In these conditions, land valuation should be carried out taking into account the most effective use, which will provide the highest residual value of the land.

When assessing a land plot, it is necessary to determine its best and most effective use (BNEI), which is determined by the interaction of a number of factors.

Main Factors, determining the optimal use of land:

1) location- a factor that has a major influence on the cost of a land plot (the prospects of the location, transport accessibility, and the nature of the environment are taken into account);

2) market demand- a factor reflecting the relationship between supply and demand in the market. It is studied to justify the chosen option for using the land plot (the state and prospects of market demand for the proposed use, competition from other plots, types of taxes and other conditions). It is necessary to highlight the market segment in which activities need to be developed;

3) financial feasibility- the ability of the project to provide income from the use of the land plot, which would be sufficient to reimburse investors’ expenses and ensure the expected profit;

4) physical suitability of the site- the prospect of creating improvements - size, topography, soil quality, climate, engineering-geological and hydrogeological characteristics of the site, existing zoning, environmental parameters, etc.;

5) technological validity and physical feasibility- analysis of the relationship between quality, costs and timing of the project, the likelihood of natural disasters, accessibility of transport, the ability to connect to utilities, taking into account the size and shape of the site, for example, the size may be small for the construction of an industrial facility;

6) legislative (legal) admissibility- compliance of the option for using the land plot with current legislation. Identified as a result of an analysis of building and environmental standards, restrictions on the number of storeys, the presence of temporary bans on construction in a given location, difficulties in the area of ​​historical urban development, possible changes in regulations, compliance with zoning rules, negative sentiments of the local population;

7) maximum profitability(maximum property income and site value), which is determined by discounting the future income of alternative uses, taking into account the risk of the investment.

A special category is urban lands. Their value is influenced by the size of the city and its production and economic potential, the level of development of engineering and social infrastructure, regional natural, environmental and other factors.

The same factors can have opposite influences on the value of a particular site, for example:

    intensive traffic undesirable for a residential area, but increases the cost of the site for trade purposes;

    placement relative to educational institutions and shopping centers, aesthetic advantages and amenities taken into account when assessing land for housing construction have virtually no effect on the value of areas oriented towards industrial development; Transport infrastructure and economic zoning are important to them.

Most land resources are currently in state and municipal ownership. Practice shows that in market conditions, urban land is a valuable resource and can serve as a stable source of local budget income. City authorities determine the amount of land tax, the rental rate for land and the standard price of a land plot upon purchase, so the issue of increasing the efficiency of land use is relevant for them.

So that land property is used more efficiently, i.e. brought maximum income from use and contributed to improving the overall investment climate, first of all, it is necessary to implement the processes of taxation, rental and purchase of urban land based on its market value.

It is the market value that is a measure of value for the user, which allows to stimulate rational, efficient use and serve as a tool for the development of the urban economy.

The results of the assessment of the urban area serve as initial information for solving the following problems:

    development of urban development policy and social planning;

    developing proposals for types of functional use of the territory, taking into account its quality;

    the formation of economic mechanisms for the placement of various land use options and investment and construction policies;

    analysis of the consequences of development options and restructuring of the urban environment;

    optimization of municipal investments in maintaining and developing the urban environment;

    determination of the investment attractiveness of the territory as a function of the cost of urban land.

The purchase of a land plot by an enterprise makes it possible to use the land as collateral for a bank loan, expand investment opportunities, sell surplus land, receive income from leasing land, increase the value of fixed assets, and increase the market value of shares.

There are two views on the value of urban land:

    urban designer in the process of functional zoning of the territory as a section of the city master plan;

    appraiser in the process of developing a cadastral valuation of land.

The basis for the formation of cadastral valuation of land and functional zoning of the territory should be a comprehensive urban planning assessment of market value.

There are several methods for assessing land.

Normative method is to determine the standard price of land. It is used when transferring, purchasing land into ownership, establishing common joint (shared) ownership in excess of the free norm, transferring by inheritance or donation, obtaining a secured loan, withdrawal for state or public needs.

Urban lands are assessed taking into account the density of development, the prestige of the area, the nature of the surrounding land use, environmental conditions, engineering and transport facilities, etc. The lands are divided into zones differentiated by the basic rates of land tax and the standard price of land (Law of the Russian Federation “On Payment for Land”) . The standard price of land is fixed in the Land Cadastre.

The basis for determining the standard price of land: land tax rates and increasing coefficients, land tax benefits are not taken into account.

It is often necessary to evaluate an object consisting of a building and a land plot, when the latter has only lease rights. In this case, the cost of allocating a land plot for construction can be taken into account as the cost of land.

In market conditions, if the necessary information is available, it is advisable to use methods based on the analysis of market data. The Order of the Ministry of Property of Russia dated March 7, 2002 No. 568-r approved the Methodological Recommendations for determining the market value of land plots. As a rule, when assessing the market value of land plots, the following are used:

    sales comparison method,

    selection method,

    land rent capitalization method,

    distribution method,

    remainder method,

    method of dividing into sections.

Sales comparison method is the simplest and most effective valuation method, can be used to evaluate both actually vacant and supposedly vacant land; allows you to determine the specific price of a land plot by making percentage adjustments to the sales prices of analogues. In the absence of information on the prices of transactions with land plots, it is allowed to use supply (demand) prices.

Common elements of comparison for land plots:

    ownership,

    financing conditions,

    special conditions of sale,

    market conditions (change over time),

    location (distance from the city and roads, characteristics of the environment),

    zoning conditions,

    physical characteristics (size, shape and depth of the site, angular location, soil type, relief),

    accessible utilities,

    economic characteristics,

    best and most effective use.

When valuing land, you can use multiple units of comparison, adjusting the price of each and ending up with multiple values ​​that define a range of values.

The method gives fairly accurate results only in a developed information-open competitive market.

The Russian land market does not meet these requirements; the value of a land plot cannot be determined based on information about sales transactions of analogue plots. Therefore, the assessment must collect all available information to apply all site assessment methods.

Ground rent capitalization method is based on the fact that if there is sufficient information on rental rates for land plots, it is possible to determine the value of these plots as the current value of future income in the form of rent for the land plot being assessed. Within the framework of this method, the value of land rent can be calculated as income from leasing a land plot under the conditions prevailing in the land market.

The formula for calculating the cost of a land plot is:

Where WITH L

I L - income from land ownership, rub.;

R L- capitalization rate for land.

The capitalization rate is determined by dividing the value of ground rent for similar land plots by their sale price or by increasing the risk-free rate of return on capital by the amount of the risk premium associated with investing capital in the land plot being valued.

The main factors influencing the rental rate of a land plot: location characteristics, size, shape, surrounding land use type, transport accessibility, engineering equipment.

Distribution method (method of correlation, correlation, allocation) - determination of the component of the cost of a land plot based on a known ratio of the cost of land and improvements in the property complex. The method is based on principle of contribution and the assertion that for each type of real estate there is a normal relationship between the value of land and buildings. This ratio is most reliable for new buildings; they are close to the best and most efficient use option.

To apply the method, reliable statistical data is required on the relationship between the values ​​of land and all property of a particular type of real estate in a given market. However, the method is rarely used even in developed markets, as it has low reliability. The use of the method is justified in conditions of insufficient information on land sales. The resulting values ​​are considered approximate.

Isolation method ) is used to evaluate built-up land plots if there is information on transaction prices for similar real estate objects. Improvements to the land correspond to its most efficient use.

The method involves the following sequence of actions:

    definition of object comparison elements;

    determining the differences between each analogue and the object of evaluation;

    calculation and making adjustments for each of the comparison elements;

    calculation of the market value of a single property, including the assessed land plot, by means of a reasonable generalization of the adjusted prices of analogues;

    calculation of the replacement cost or cost of reproduction of improvements to the assessed land plot;

    calculation of the market value of the assessed land plot by subtracting from the market value of a single real estate object, including the assessed land plot, the cost of replacement or the cost of reproduction of improvements to the land plot.

The allocation method is used when the contribution of improvements to the total price of the plot is small, it is recommended for evaluating suburban areas (for which the contribution of improvements is small and is quite easily determined), and is used in the absence of data on sales of land in the surrounding area.

The method is most effective in a passive market (there is no data on the sale of vacant land plots), taking into account the characteristics of the initial information and the model for obtaining the desired value. The cost of a land plot in general is determined by the formula:

,

Where WITH 3 - cost of land, rub.;

WITH- cost of the object, rub.;

Su- cost of improvements, rub.

Remainder method is based on the investment group's technique for physical components. The method is used to evaluate built-up and undeveloped plots, if it is possible to develop the assessed land plot with income-generating improvements. The value of land is determined by capitalizing the portion of income attributable to the land.

To determine the value of a plot of land, it is necessary to know the cost of the building, the net operating income of the entire property, and the capitalization rates for the land and for the buildings.

The main steps of the residual method for land:

1) the net operating income of the entire property is determined based on market rent and estimated operating expenses;

2) the net operating income related to the structure (building) is determined;

3) net operating income attributable to the land plot is capitalized into the value indicator through the capitalization rate for the land.

It is difficult to predict income in conditions of insufficient economic stability.

Subdivision method (development approach) is used in assessing land suitable for subdivision into individual plots. Consists of the following steps:

    determining the size and number of individual plots;

    calculating the value of developed plots using the method of comparing comparable sales;

    calculation of costs and development schedule, expected period of sale and reasonable business profit;

    deducting all development costs and business profits from the estimated total sale price of the sites to determine the net proceeds from the sale of real estate after completion of development and sale of individual sites;

    choosing a discount rate that reflects the risk associated with the period of expected development and sale.

Land development costs usually include:

    expenses for laying out, clearing and grading sites;

    expenses for the construction of roads, sidewalks, utility networks, drainage;

    taxes, insurance, engineering fees;

    marketing expenses;

    contractor's profit and overhead, etc.

Modeling of potential rental income for various types of land use is based on the patterns of formation of rental effects of location and prevailing prices (sales and rentals). Considering the significant difference in cost indicators for plots located along the front of the city’s road network and located in intra-block areas, these plots are subject to mandatory division during assessment.

The implementation of the principle of the most effective use occurs in conditions of competition for the use of real estate between various functional segments of the market, taking into account real restrictions on the volume of demand and the possible multifunctionality of the territory, as a result of which a set of land users is formed on each site.

Property Valuation Report is a mandatory written part of the specialist’s work and it is this document that is handed to the client.

But the relationship between the specialist and the other person who asked for the service is also fixed in the report and in a special agreement.

One way or another, the work performed and the report compiled on it indicate that the service was received. The conclusion is a document that has legal force.

If it was compiled by a professional in his field, then the report can be attached to court documents, and can also be used in legal disputes and litigation, attached to the case of inheritance and participate in other transactions provided for by the general trade turnover in our country.

Real estate appraisal assignment

Property inspection assignment is an action that precedes the assessment procedure. Upon receiving an order to carry out work, a specialist, so to speak, receives the corresponding tasks. As part of this task, he must establish a number of facts. These include:

  • study of the object,
  • legal characteristics of real estate,
  • exact location,
  • characteristics of boundaries.

In addition, when reviewing the assignment, the real estate professional should:

  • study all the nuances of the object,
  • familiarize yourself with the entries in it in the appropriate register,
  • find out information from the owner,
  • retrieve archival documents if necessary.

Each appraiser must carry out these actions so that the report compiled based on the results of the work contains only reliable information that corresponds to reality.

It is very important to pay attention to who is writing the report.

A specialist appraiser who has the appropriate education has the right to draw up a report. Neither the assistant nor the secretary has the right to draw up this document. Upon completion of the report, the date of its preparation, the signature of the appraiser, and also a seal are placed if the client dealt with the company.

But often, in practice, it happens that the specialist forces the appraiser’s assistant to write a conclusion with all its complex nuances and rules, and the professional himself only signs.

This behavior is fraught with consequences in the form of an illiterate description of the assessment process and conclusions on the analysis of the value of real estate due to the lack of experience of the assistant or secretary.

Who prepares the appraisal report for the property being purchased?

Conclusion on the property being purchased, or rather, on its valuation as well Only a specialist appraiser has the right to compile.

The fact is that before purchasing real estate, future owners ask a professional to check the condition of the property. Only a person with specialized knowledge can accurately describe the condition. This means that it is they who should draw up the report in order to most competently reflect the current state of affairs.

Report price

It is not worth talking about the cost of a real estate value analysis report. The cost of a report on assessing the value of a property depends not only on the region where the citizen lives, but also on the object itself. If we are talking about commercial real estate, and we take into account the central zone of Russia, then the cost of the assessment will start from 15,000 rubles, accordingly, this is the cost of the report.

If we talk about real estate such as a house, a built cottage or a plot of land, then the cost of the work of a highly specialized specialist and the subsequent preparation of the corresponding document will vary from six to 8,000 rubles.

If we are talking about an ordinary apartment or room, then the cost of the apartment assessment report will cost you the amount not exceeding 5000 rubles.

In the regions of the far north, the value of this amount is slightly overestimated, but in the outback of central Russia, on the contrary, it is much lower. And don’t worry that the cost of the work involved in drawing up a conclusion is too high. In any city you can find alternative options, because a lot depends on the experience of a particular specialist.

Conclusion on the market value of the property


Real estate valuation report(a sample real estate valuation report can be downloaded above) is a document that is drawn up in accordance with the current law of our country and contains all the results of the assessment of the market value of the property, as well as a list of all the examinations carried out.

This act may include the following information:

  • basic information about the object,
  • description,
  • the basis for carrying out specialist actions,
  • overview of the current real estate market,
  • information about what methods were used in the assessment,
  • the possibility of transferring real estate as collateral,
  • calculation of the value of the appraisal object,
  • and also, what documents were used by the appraiser as a source of information to compile the report.

They must be provided both by the owner himself and by some authorities servicing the property, such as a management organization.

Report on the assessment of the purchase price of the apartment

Apartment assessment report(we suggest looking at an example of an apartment appraisal report above) - this is a document that is drawn up on the basis of the law and is intended to determine how well the purchase price corresponds to the actual condition of the housing.

In this case, an independent assessment of real estate should presage the redemption procedure. It is necessary to determine a fair price.

Its location, layout, environmental condition, neighbors, and so on are taken into account. The cost analysis procedure follows a general basis, however, the report emphasizes that the apartment is being prepared for purchase.

Conclusion on the assessment of the foundation of a residential building


Residential building foundation assessment report is a document that contains an expert opinion that describes the foundation of a residential building, talks about its strength, expected service life, as well as various problems that may arise in connection with the operation of the building.

In this situation, the emphasis is on the state of the object. It would also be a good idea to indicate its width, height, materials used, as well as the year it was poured.

Residential fire damage assessment report

The damage assessment report from the fire that occurred contains the following data.

  1. Firstly, an analysis of all documents presented, as well as testimony. This also includes reviewing photographs and their subsequent analysis and examination.
  2. Description of all the necessary techniques used by specialists. An approximate justification for each of the methods used, making the necessary calculations, drawing up an estimate plan that includes restoration work after a fire, an approximate calculation of the deterioration of the building, a list of the available package of documents, as well as an inspection plan.

Review of the report


Review of the apartment leak assessment report drawn up in the case when, for one reason or another, the property was the initiator of flooding.

In this situation, it is necessary to assess not only the damage that was caused to the apartments below, but also the damage to the property that caused the flood.

In this situation, a specialist appraiser is also called in, who is obliged to carry out all the necessary work and examinations in order to establish the cause of the leak and the damage caused, as well as generally establish how much the property has lost in value due to this incident.

Coordination of real estate valuation results

Coordination of property inspection results is a procedure in which two reports, which were drawn up upon the application of the same owner, are compared with each other in order to accurately determine the estimated value of a particular property.

In this case, the opinions of two experts can either agree or diverge, but not significantly.

In this case, an additional assessment is made, and the result is submitted to the owner of the object selected for examination. A distinctive feature of this report is that it is compiled in the form of a table.

Now you know in what situation what specific real estate valuation report you may need, and you can choose the one you need on your own, without the help of specialists.

However, only a competent professional can help you draw up this document, whom you can find through the corresponding advertisement in the city itself.

Bank of assessment reports is a unique platform that allows appraisers and experts to exchange their professional knowledge, experience and practical experience, get acquainted with the work of colleagues and discuss various practical, methodological and theoretical issues using specific practical examples.

At the moment, the Report Bank contains more than 1,900 different works of appraisers and experts, the number of active users of the service exceeds 500 specialists.

The Bank of Assessment Reports is a new tool in the work of the appraiser and expert, providing specialists with great opportunities:

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By participating in the affiliate program, you can exchange reports and opinions with other appraisers and experts throughout our country. As our Internet server grows, this can provide truly unlimited possibilities. For example, you need an example of a report made according to the standards of one of the SROOs. With the help of the “report bank” you will find it in a couple of seconds. Have you encountered some new object of assessment in your practice and do not know how to conduct an assessment? - A couple of clicks and you will find an example.

Quickly find the necessary practical examples using the Report Bank

Using a convenient system for searching reports using a huge number of criteria, you can quickly find a report based on various criteria (for example, by the address where the object being assessed is located). The search criteria are constantly being refined and adjusted taking into account the wishes of the evaluators.

Discussion of various professional issues using examples of specific works

Using the Report Bank, you can discuss various practical, methodological and theoretical issues using the example of specific works with their authors and other specialists, contact and consult with appraisers and experts who have posted assessment reports and expert opinions that interest you, receive reviews and comments on your work from the entire professional community.

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The appraisal report is used to record the progress of the appraisal and record the initial data, data analysis, conclusions and the price set by the appraiser.

The report contains photographs, maps, and sketches not included in sections of the report.

Sometimes a glossary of terms is included with the report.

Evaluation report form

The document is provided in written form. It must be simple and accessible, but executed in accordance with professional ethics.

The report must be provided to the customer in a timely manner. It must not contain false or misleading statements. If during the assessment the market price of the object was not determined, the appraiser is required to indicate the assessment criteria.

It is also required to indicate the possible difference in comparison with the market price and the reasons for the deviation.

This document is regulated by Art. 11 of the Law “On Valuation Activities in the Russian Federation”.

The report must indicate:

    date of preparation of the assessment report, as well as the serial number of the report;

    the reasons that led to the assessment of the object;

    legal address of the appraiser, license number under which this employee evaluates the property;

    a detailed description of the object in relation to which the assessment is being carried out, if the object belongs to a legal entity. You will need to indicate the details of this legal entity, as well as the book value of this object;

    evaluation criteria for this type of objects. It will be necessary to justify why this particular type of criteria is used in relation to this type of objects, a list of data regarding this object, as well as the sources of their receipt. You should also remember about the assumptions made in assessing the object;

    indicates the sequence in which the assessment of this object was carried out, the final price of the object, the possible scope of deviation from the established price, as well as the limits of application;

    date of assessment;

    documents used by the appraiser during the assessment of the object, used to assess the qualitative and quantitative condition of the object.

The appraiser may provide additional information that he believes is important in explaining the final figure and his methods of work.

The report must be signed and sealed by the appraiser involved in the work.

If a controversial issue arises regarding the established value of an object, the court will consider it.

Structure of the assessment report

Letter accompanying the report

1. General information about the object.

1.1. Basic facts, as well as conclusions drawn based on these facts.

1.2. Object of assessment.

1.3. Certificate of quality assessment.

1.4. Qualification level of appraisers.

1.5. Assumptions and limitations made during the assessment.

2. Terms that were used during the assessment.

3. Conducting an analysis of the object’s environment and the object itself.