| The term property valuation refers to determining | | | | in rating compulsory purchases. |
| the value of real property usually in terms of its | | | | Residual/development method: Used in development |
| market value. Here real property refers to both | | | | projects. Here real estate developer sells most of the |
| movable and immovable property like land, buildings, | | | | property. |
| machinery, equipments etc, and market value refers | | | | Accounts/profits method: Used for trading properties |
| to the price at which the property/asset would be | | | | where evidence for rate is slight, i.e. hotels, |
| traded at a competitive auction setting. The need for | | | | restaurants, old age homes etc. |
| appraisals in property valuation may arise if the | | | | The best way of valuation, especially in turbulent |
| property is of a heterogeneous nature. The appraisals | | | | markets like South-East Asia, is that which one of |
| are performed by licensed appraisers. The process of | | | | the fundamental concepts of finance, i.e. "the value |
| valuation of property is also referred to as land | | | | of an asset is the present value of future cash |
| valuation and real estates appraisal. | | | | flows". |
| There are several types of values of property based | | | | The owner of a property is assigned a property tax |
| on which the price of the property is determined. | | | | based on the valuation of property that is achieved |
| Some of the types are listed below: | | | | through either of the above mentioned methods. |
| 1.Market value: The price at which the property is | | | | Property tax is imposed by municipalities, based on |
| traded in a competitive market. | | | | the value of property, on the owners of real |
| 2.Value in use: The value to a particular user. It is | | | | property within their jurisdiction. |
| lower than Market value | | | | The task to sell property can become a heavy duty |
| 3.Investment value: The value to a particular user and | | | | responsibility in case the owner is clueless regarding |
| is higher than market value | | | | how to go about it. Many sellers fail to attract |
| 4.Insurable value: Value covered by insurance policy. | | | | potential buyers because they are unaware of basic |
| 5.Liquidation value: Likely price of a property after | | | | requirements to conduct such deals legally. Some tips |
| reduced exposure to potential buyers because of | | | | for selling a property are listed below: |
| insufficient time to sell in market. | | | | Studying trends in the market and looking at rates. |
| There are set guidelines to calculate the valuation of | | | | Assessing the net worth of the property. |
| property. Following one of the several methods in | | | | Using classified advertisements to find a prospective |
| use you can determine how to value your property. | | | | buyer. |
| Some methods are described below: | | | | Communication with the concerned governing body |
| Investment/income method: Takes into account the | | | | about the intention to sell the property and obtaining |
| future cash flow that the real property can bring to | | | | a 'No Objection Certificate'. |
| the investor. It is least subjective and gives a fair | | | | Legal documentation of the property which would |
| view of value. | | | | include appointment with a sub-registrar to get the |
| Comparative method: It is based on the latest | | | | property registered in the name of the buyer and |
| comparative figures in the market. | | | | working out all other formalities under the |
| Contractor's/cost method: Cost based method used | | | | Registration Act. |