Appraisal 101

Augusto B. Agosto Real Estate Appraiser & Broker

www.appraisalcebu.wordpress.com

Sales Partners General AssemblyGoldmine ResidencesSoong, Lapulapu CitySeptember 5, 2014

Topic Outline

1. Importance of Appraisal

2. How appraisal helps Brokers/Agents

- Comparable Market Analysis

3. Conclusion

What is Appraisal?

• Real estate appraisal or property valuation is the process of developing an estimate of the value of a real property . It includes all of the research, data, reasoning, analysis, and conclusions necessary to arrive at a value estimate.

VALUATION STANDARDS

• It is a detailed process and guided by the standards set by International Valuation Standard (IVS), Philippine Valuation Standard and Generally Accepted Valuation Principles (GAVP)

On Value

• Zonal Value - is a value placed on real estate based on where it is located by the BIR

• Assessment value - the financial worth placed on a property by the town or city’s assessor’s office for the purpose of determining the tax due said property

• Market Value - estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction

APPROACHES TO VALUE

1.Market Data

2.Cost

3.Income

Comparative Market Analysis• Choose comparable and

make adjustments- superior and inferior. If a “comps” is superior to the subject property a downward adjustment is made to the sale, and if a “comps” is inferior to the subject property an upward adjustment is made.

COMPS House 1 House 2 House 3

Size +10 % - 10 % -20 %

Location + 20 % + 10 % +10 %

Frontage - 10% - 10 % -10%

Features + 10 +20% -15%

Total Adjustments +-

Comparative Market Analysis

SUBDIVISION

COMPS SUBDIVISION 1

SUBDIVISION 2

SUBDIVISION 3

Size +10 % - 10 % -20 %

Location + 20 % + 10 % +10 %

Number of Units - 10% - 10 % -10%

Amenities + 10 +20% -15%

Total Adjustments +-

Map of Lapulapu

Economic Principles that affects Value

• Principle of Anticipation- The principle of anticipation holds

that value is simply a function of the present worth of future benefits, that is, people are paying current dollars for future benefits.

• Principle of Balance- relates both to the property as well as the environment in which the property is located.

• Principle of Progression- holds that the worth of a residence of less expensive will tend to be increased by being in association with residences of higher one in the same area. The opposite of the Principle Of Regression.

CONCLUSION

• There are no "guesstimates" when it comes to appraisal.

• In our real estate profession where TRUST is the most important aspect, a real estate professional-broker and agents, should recommend in acquiring the services of a licensed appraiser.

Contact an AppraiserLandline: (032) 421-2003Mobile : (0917) 488 5555Email: appraiserph@gmail.com