Philippines affirmed the IVSC estimation criteria for estimation and estimation of real estate property under the frame of reference of the Philippines convention. Real estate identifiers use it as a standard for valuing land based properties.
usually used procedures under this context are :
Sales Comparison procedure : in this method thevaluator investigates information in connection with the lately sold houses in that vicinity to use that data as a benchmark. The evaluator uses the data to find value patterns and trends in the market. The assessor also gathers data about other buyer profiles,span of time on the market, number of comparable listed properties accessible during this time. These value are used by the agent to valuate a market estimate. It is one of the most accepted approaches to real estate market valuation. And it holds good for residential properties.Thisapproach is fitting to all categories of real property. However it is not stable for commercial properties & it does not hold firm when market is fragile and there is insufficient market transactions.
Cost Approach : In this practice a purchaser of a real estate should not pay more for a property than the cost of switching it with an similar property less the applicable depreciation.Three methods are used practically in this method.They are:
Reproduction cost method : This method is suitable when the cost of a latest equivalent asset is more than the cost of making a clone of the subject asset,
Replacement cost method: it involves assessing the price that a market player would pay and the exchange cost is adjusted for physical decline and all applicable forms of degradation.
Summation method : Mainly used for investment companies, the steps involves evaluating each of the elementary assets and summing the value to find the main asset value.
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