Independent real estate valuation is today, one of the integral procedures in the general system of economic relations. Moreover, the valuation of the value of a residential and commercial property, as an economic category, directly affects the development and state of the real estate market.
This happens for completely understandable reasons: since measures for free property valuation are an integral part of price development in various segments of this market, as well as a reflection of all trends affecting price formation. And this, in turn, reflects the state of the economy as a whole. Moreover, this is relevant for all types of valuation activities in this dynamic and vital market, both for the well-being of macroeconomics and for an individual person. This is the valuation of residential real estate and the valuation of fixed assets of firms and companies of all types of property.
A serious, professional, proven company with clients, both individuals and legal entities, the company necessarily owns the methodology and practice of appraising both residential and commercial real estate. And this is one of the criteria for choosing a particular company for evaluating actions.
WHAT IS REAL ESTATE VALUATION FOR?
One of the examples of the practical activity of an appraiser, when the valuation of residential real estate is interconnected with the valuation of commercial real estate, is the transfer of an object from a residential to a non-residential fund. This is always necessary when it comes to legalizing an office, warehouse, or production facility.
Independent real estate valuation is also a mechanism of interaction between all participants in such a global sector of the economy as the residential and commercial real estate market. Indeed, the entire population of the country is involved in the turnover of this market. And valuation activity in this market is a kind of regulator of relations between individuals and legal entities, as well as their relations with creditors and insurance companies in the mortgage lending market.
The valuation of the value of real estate objects is both a forming factor and a product of pricing policy at the same time. And if we take into account the fact that the real estate market belongs to the fundamental sectors of the economy, it can be argued without any exaggeration that the assessment of the value of a property is a regulator of the stability of a market-oriented economy as a whole.
Moreover, an objective, scientifically grounded, unbiased assessment of residential real estate and fixed assets, if we consider it as a macroeconomic regulator of the relationship of all entities in the real estate market, also affects the inflation rate in the country. And this already applies to everyone without exception.
THE RELATIONSHIP BETWEEN PROPERTY VALUATION AND INFLATION
The fact is that if there is a sufficiently large corruption component in the price of a mass-market product, moreover, demand with a huge turnover rate and the inclusion of huge money supply in this turnover, then as a result, a huge “financial bubble” that does have no relation to the real appraised value of the goods.
Residential and commercial real estate is just such a product. An objective assessment of the value of real estate “cuts off” this “financial bubble”. Biased, biased assessment, on the contrary, contributes to the swelling of this financial “excess weight”, which does not correlate in any way with either expanded reproduction or the estimated value. Therefore, in order to maintain the supply-demand balance,
Based on the foregoing, it is the independent valuation companies that are not associated with clan and industry interests with developers and development banks that are increasingly in demand not only among private investors in residential and non-residential real estate but also among corporate customers.
The same can be attributed to analysts and players of stock exchanges and organizers of real estate auctions. These seemingly general categories given above will not seem so general, but quite specific when we look at how much real estate valuation is in demand when analyzing stock market quotes. And in this regard, first of all, an
The independent valuation of real estate is in demand.
The fact is that the price of shares of one or another company participating in the stock market directly depends on the value of its assets, one of the components of which is fixed assets, that is, buildings, structures, offices, warehouses, etc.
An independent valuation company is precisely called upon, in this case, to determine in value terms the share of fixed assets in the company’s assets. But this is not even the most important thing. An independent appraiser develops invariant criteria for assessing fixed assets in the space of a constantly changing economic environment. This allows not only to evaluate the company’s shares at the stock exchange trading at a given time but, which is no less important, to predict fluctuations in the quotations for the shares of a particular company. Thus, an independent valuation company, albeit not directly, but nevertheless, provides the tools for analyzing and forecasting the turnover of securities to the players of the stock exchange.
So, we are slowly but surely approaching the role and significance of real estate valuation as an economic category in macroeconomics as a whole, to the very specific economic and legal requirements of the current legislation, when it is impossible to do without valuation activity.
FEATURES OF COMMERCIAL REAL ESTATE VALUATION
Any company intending to issue its shares on the stock exchange in order to attract additional investments will definitely need an independent assessment of its fixed assets. Or in other words, the assessment of commercial real estate. The same is true if the real estate object is put up for auction within the framework of various commercial, for example, a commodity exchange, and municipal programs.
WHAT DOES THE CONCEPT OF COMMERCIAL REAL ESTATE INCLUDE?
For example, office real estate. This can be a stand-alone room or a room in a residential building, in an office center. This can be the basement of the housing stock, etc. The same applies to storage facilities. It also takes into account the proximity to traffic intersections, location, technical capabilities of security, etc. All this means that the criterion for the professionalism of a valuation company is universality and flexibility in methodological approaches to the valuation of commercial real estate. An important factor is the assessment of the “documentary purity” of the object. And this also significantly affects the price of the premises.
The valuation of residential real estate has become a daily reality in our life. All issues related to the sale and purchase, mortgage lending, donation, and inheritance agreements inevitably involve such a procedure as the valuation of residential real estate.
VALUATION ACTIVITIES AND INSURANCE
Recently, housing insurance has been gaining momentum. In this case, the valuation of residential real estate is both a necessary requirement of the insurer and the most important instrument of the policyholder’s relationship with the insurance company. Moreover, according to statistics, personal housing is insured, as a rule, by wealthy citizens, therefore, deep practical skills are required from the valuation company when the valuation of residential real estate scrupulously takes into account such factors as the condition and quality of repairs, apartment redevelopment, design, as well as its location, convenient parking for personal vehicles and ecological cleanliness of residence.