HOW TO ASSESS THE VALUE OF THE APARTMENT

Condominiums or apartment complexes are buildings consisting of many households living inside self-contained apartments, with a system of shared infrastructure facilities. The interior of the apartments can be fully furnished or unfurnished and homeowners can choose to decorate the house themselves. So how should the price be assessed?

The role of the apartment

Apartment buildings have a role in the development of modern urban areas, because when urbanization develops and densely populated areas arise, problems and demands (urgent about housing, housing costs, etc.) accommodation, and other public facilities…). The development of apartments to save land use area, reduce construction costs, create housing opportunities for many people of different classes. At this time, people have a need to use apartments to be able to work long-term, stably and for future generations to have good development conditions. Therefore, many projects began to develop and apartments began to appear to solve the problem of housing for people.

Survey of apartments for appraisal

Sources of information and data play a particularly important role in the appraisal of apartment prices. Therefore, the appraiser needs to collect and analyze in the most accurate way the collected information.

(i) Apartment legal: Appraisers need to ask customers to provide full legal information when appraising the price, because legality is an important factor determining the value of the property. An apartment today is usually a purchase and sale contract with the investor or a certificate of land use rights and properties attached to the land (pink book).

(ii) Information about the area, city and province of the apartment building: Population; Construction, Rate of vacant apartments; Public services in the area; Cultural works and facilities in the area…

(iii) Information about the neighborhood, around the apartment: Traffic network; Utilities market, supermarket; Parking; Distance to workplace, school; Garbage collection and treatment services; Population density and age; Regional roads; The amusement park…

(iv) Physical and natural characteristics of the apartment for appraisal:

• Location of the apartment building: Surveying information about land data such as area (of the building), shape of land plot, legality of land plot, public utilities, road system...;
• Information and data about apartments: Foundation; Chassis; Doors, Windows; exit; Wall; Electricity and water supply system; Elevator system; Lighting system, Electrical system; The entrance to the garage area
• Location of the apartment: Corner unit; Normal apartment; Low floor; High floor; Middle floor

(v) Survey of information and data on similar and neighboring apartments: In order to accurately estimate apartment units, the appraiser must collect, analyze and interpret data about the apartments. similar apartment buildings in the same building, or nearly the same in the vicinity. Here are some information and data about comparable apartments that the appraisal needs to collect, analyze and compare:

• Compare with similar apartments: Same purpose of using the apartment; Same characteristics of the neighborhood as the apartment to be appraised; Apartment size, usefulness, function, apartment design, interior, apartment shape; Quality of apartments built;
• Comparing and contrasting the selling prices of apartments, including criteria such as: Similarity in design, construction quality; Similar in terms of effective life, remaining economic life; Similar to the type of apartment; Similar in terms of wear and tear, depreciating due to functional obsolescence; Same as the rent

(vi) Investor: The reputation of the investor is an important factor when customers buy an apartment. Works built from reputable units are always rated higher quality.

(vii) Figures on income from sale or rental, operation and maintenance costs of the condominium: The appraiser needs to learn about the apartment rental market with market rents, and conclude suitable for collecting information from surveys and surveys of statistical agencies in the most accurate way; Operation and maintenance costs: Review the annual balance sheet of the apartment.

Appraisal of apartment according to market price

Currently, the most commonly used method of apartment appraisal by appraisers is the comparative method according to the market approach. Appraisal (apartment) is based on the analysis of the price of comparable properties (other apartments) to estimate and determine the value of the appraised property. Therefore, in order to conduct a comparison, the appraiser must collect transactions on the current market of apartments that are similar or relatively similar to the target apartment to be appraised. Then analyze the transaction values ​​and make the necessary adjustments to arrive at the fair value of the target property.

The specific steps are as follows:

Step 1: Search for information about the apartment that has been traded in the nearest time that can be compared with the target apartment in terms of aspects, the main factors affecting the value such as: style , location, environmental conditions, etc. Specifically, the appraiser needs to base on the following 7 basic factors for comparison:

• The physical condition of the apartment.
• Site characteristics.
• Characteristics of relevant construction works.
• Location characteristics or characteristics.
• Legal status.
• Transaction time.
• Terms and conditions of the transaction.

Step 2: Conduct inspection and analysis of evidence transactions to ensure comparable properties with the target apartment. To perform this step well, when examining and analyzing market transactions, it is necessary to clarify: the origin, characteristics and nature of the transactions.

Step 3: Select a number of comparable apartments that are most appropriate. According to experience, Chengdu appraisal company usually takes 3 to 6 properties for comparison.

Step 4: Identify the factors that differ between the target apartment and the comparable apartment. At the same time, based on different factors to adjust the price of apartments. The usual adjustment is to take the target apartment as the standard, and make the adjustment with the comparable apartment. If the comparable apartment has factors that are considered to be better than the appraised apartment, the transaction value of the comparable apartment will be adjusted down and vice versa.

Step 5: Estimate the value of the appraised apartment on the basis of the adjusted prices.

Reputable apartment and apartment appraisal unit

Indochina International Appraisal & Investment Joint Stock Company (INA) with many years of experience in the field of appraisal with abundant data warehouse, a team of highly qualified and professional appraisers, fast appraisal process, In addition, SunValue service of INA will provide customers with information about the value of the business with high reliability for each appraisal purpose.