Necessity Of Real Estate Appraisal

Real estate valuation is an area that many countries in the world, including developed and developing countries, have researched for decades.

In countries such as the US, Sweden, UK, France, Australia, Malaysia, Singapore ... land and real estate valuation has become an important sector of the economy. The research results on land prices, real estate valuation principles and methods have been widely applied in valuation activities, facilitating civil transactions in the real estate market such as real estate trading, transfer, lease, inheritance, or mortgage took place smoothly.

Currently, land and real estate pricing activities in many countries around the world are both a tool of state management of the real estate market and a popular service in the market economy. is under the control of the state.

Although there are differences in the form and organization of the state apparatus, the content of pricing and state management for land and real estate valuation in general in many countries around the world has very similar points. Each other, and these are points that our country can apply to curb the current situation of floating real estate prices.

Most of the laws related to real estate and real estate brokerage of countries specify that pricing and management of land pricing has been identified as one of the main contents of state management activities. Land and real estate pricing activities take place within an established legal corridor, in which the institutionalized content is complete and detailed.

Regarding the real estate valuation regime: The assets subject to valuation are land and other real estate attached to land. The extent to which the valuation of land and real estate subject to tax or fee is required upon transfer of use purpose. Land and real estate valuation is conducted every 4 years, 5 years or 6 years, depending on the regulations of each country. In cases of transferring, inheriting, mortgaging or changing the purpose of land use, the valuation of land and real estate will be conducted unexpectedly as required.

Regarding land and real estate valuation methods: All countries use traditional valuation methods, that is: comparison method, which uses the selling price (transaction cost) of real estate. Similar transactions have been made in the market (real estate comparison) as the basis for determining prices for properties to be priced.

Cost method (cost method): Based on the theory that the market value of an invested land plot can be calculated by the total value of land and the value of buildings attached to the land has been amortized. The income method (investment method) is the analysis of the investment market, determining the net profits that will be likely to be obtained in the future.

Regarding the organization, functions, tasks and operating mechanism of the valuation agency: In general, there are two models of valuation organization: the state valuation organization and the private one. Private valuation organizations are subject to the state management of state pricing agencies.

State valuation organizations have the function of setting land and real estate prices, performing the state management of land and real estate valuation nationwide. Accordingly, land and real estate prices are priced and issued according to cycles or initial prices, real estate of great value (depending on the regulations of each country) will only take legal effect when approved. Central valuation committee approved. In the case of land parcels or real estate with private valuation participation, if the valuation results of such agencies have a large difference in value that cannot be negotiated by the parties, it is required to give Court decision to resolve, the courts decision will be final and have the force of law.

Private valuation organization: Formed and developed in a market mechanism to meet the frequent and diverse needs of the private sector for land and real estate such as mortgage, transfer , lease, inheritance, insurance, investment and development, and in many cases to resolve related parties disputes over real estate value. The private valuation organization operates mainly in the form of a limited liability company. To understand this problem one can consider Singapores pricing model.

In Singapore, there is the Institute of Valuation and Valuators (also known as Valuation Association) established in 1963. The Institute is the only professional national organization in Singapore, representing research researchers, researchers property valuation. The forerunner of the Institute is a branch founded in 1937 under the Royal Institute of Valuation. Members include: students, trainees, members, members and honorary members.

The Price Valuation Association operates under the Law on Registration of Professional Organizations. Every year, the association organizes annual conferences, seminars, appraiser training courses on price. A valuation company affiliated to an association that provides valuation services is the only company that has the function of appraising land prices for the Government.

Valuation businesses are established primarily in the form of limited liability companies. In Singapore, there are about 60 private valuation companies with more than 600 employees with valuation cards (7,000 people have 1 valuation card), the number of valuation cases of all companies is more than 6,000 cases. per year.

In Singapore, valuation is a profession. Valuators can work in the private sector, for large corporation organizations, and they can also work for government ministries or business line ministries. Valuation can also work for government agencies or similar organizations like Development Bank housing (HDB), the Department of development planning suburbs, the General Land Administration, Department of Taxation ...