Statewide Valuations Pty Ltd
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Statewide Valuations are an independent network of university qualified property valuers providing property valuations from $175 inclusive of GST throughout Sydney. Our teams of senior valuers are all practicing valuers licensed to value property throughout NSW without limitation.
Our valuers are proud to offer clients independent property valuations and property valuation services. All our property valuers are familiar with and will take the time to work you through the valuation process if necessary, to ensure you are completely happy with our property valuation service. All our property valuers abide by a Code of Professional Practice, Code of Ethics and Rules of Conduct.
Property Valuers provide solutions to all types of property valuations, and are a convenient service for Property Valuation Professionals and their clients.
Property Valuers provide independent valuations and act in YOUR best interest.
General Information:-
There are three general groups of methodologies for determining value. These are usually referred to as the "three approaches to value"which are generally independent of each other:
* The cost approach
* The sales comparison approach
* The income approach
However, the recent trend of the business tends to be clinging to the scientific methodology of appraisal which relies on the foundation of quantitative-data, risk, and geographical based approaches. Notwthstanding the above a review on the methods used in the industry by comparison between conventional approaches and advanced ones is the general approach.
The appraiser at OZ Property Valuers using three approaches will determine which one or more of these approaches may be applicable, based on the scope of work determination, and from that develop an appraisal analysis. Costs, income, and sales vary widely from one situation to the next, and particular importance is given to the specific characteristics of the subject.
Consideration is also given to the market for the property appraised. Appraisals of properties that are typically purchased by investors (e.g. - skyscrapers) may give greater weight to the income approach, while small retail or office properties, often purchased by owner-users, may give greater weighting to the sales comparison approach. While this may seem simple, it is not always obvious. For example, apartment complexes of a given quality tend to sell at a price per apartment, and as such the sales comparison approach may be more applicable. Single family residences are most commonly valued with greatest weighting to the sales comparison approach, but if a single family dwelling is in a neighborhood where all or most of the dwellings are rental units, then some variant of the income approach may be more useful.
The cost approach
The cost approach was formerly called the summation approach. The theory is that the value of a property can be estimated by summing the land value and the depreciated value of any improvements. The value of the improvements is often referred to by the abbreviation RCNLD (reproduction cost new less depreciation or replacement cost new less depreciation). Reproduction refers to reproducing an exact replica. Replacement cost refers to the cost of building a house or other improvement which has the same utility, but using modern design, workmanship and materials. In practice, appraisers use replacement cost and then deduct a factor for any functional disutility associated with the age of the subject property.
In most instances when the cost approach is involved, the overall methodology is a hybrid of the cost and sales comparison approaches. For example, while the replacement cost to construct a building can be determined by adding the labor, material, and other costs, land values and depreciation must be derived from an analysis of comparable data.
The cost approach is considered reliable when used on newer structures, but the method tends to become less reliable for older properties. The cost approach is often the only reliable approach when dealing with special use properties (e.g. -- public assembly, marinas).
The sales comparison approach
The sales comparison approach in a real estate appraisal is based primarily on the principle of substitution. This approach assumes a prudent individual will pay no more for a property than it would cost to purchase a comparable substitute property. The approach recognizes that a typical buyer will compare asking prices and seek to purchase the property that meets his or her wants and needs for the lowest cost. In developing the sales comparison approach, the state licensed real estate appraiser attempts to interpret and measure the actions of parties involved in the marketplace, including buyers, sellers, and investors.
Method of Data Collection Data are collected on recent sales of properties similar to the subject being valued, called comparables. Sources of comparable data include real estate publications, public records, buyers, seller, real estate brokers and/or agents, appraisers, and others. Important details of each comparable sale are described in the appraisal report. Since comparable sales are not usually identical to the subject property, adjustments may be made for date of sale, location, style, amenities, square footage, site size, etc. The main idea is to simulate the price that would have been paid if each comparable sale were identical to the subject property. If the adjustment to the comparable is superior to the subject, a downward adjustment is necessary. Likewise, if the adjustment to the comparable is inferior to the subject, an upward adjustment is necessary. From the analysis of the group of adjusted sales prices of the comparable sales, the state licensed real estate appraiser selects an indicator of value that is representative of the subject property.
Steps in the Sales Comparison Approach
1. Research the market to obtain information pertaining to sales, listings, pending sales that are similar to the subject property.
2. Investigate the market data to determine whether they are factually correct and accurate. 3. Determine relevant units of comparison (e.g., sales price per square foot), and develop a compararive analysis for each.
4. Compare the subject and comparable sales according to the elements of comparison and adjust as appropriate.
5. Reconcile the multiple value indications that result from the adjustment of the comparable sales into a single value indication.
The income capitalization approach
The income capitalization approach (often referred to simply as the "income approach") is used to value commercial and investment properties. Because it is intended to directly reflect or model the expectations and behaviors of typical market participants, this approach is generally considered the most applicable valuation technique for income-producing properties, where sufficient market data exists to supply the necessary inputs and parameters for this approach.
In a commercial income-producing property this approach capitalizes an income stream into a value indication. This can be done using revenue multipliers or capitalization rates applied to the first-year Net Operating Income. The Net Operating Income (NOI) is gross potential income (GPI), less vacancy and collection loss equals (Effective Gross Income) less operating expenses (but excluding debt service, income taxes, and/or depreciation charges applied by accountants).
Alternatively, multiple years of net operating income can be valued by a discounted cash flow analysis (DCF) model. The DCF model is widely used to value larger and more expensive income-producing properties, such as large office towers. This technique applies market-supported yields (or discount rates) to future cash flows (such as annual income figures and typically a lump reversion from the eventual sale of the property) to arrive at a present value indication.
$175
Stamp Duty Valuations
(02) 9361 3984
Valuations
Residential, commercial and industrial
Pre-purchase/sales
Probate
And more
Other Services
Land and environmental matters
Feasibility studies
Court appearances
And more
�2005 252A Moore Park Road / Paddington Sydney NSW 2021 / Ph: (02) 9361 3984 / Fax: (02) 9361 3983
* Home
* About
* Valuations
* Contact
Statewide Valuations are an independent network of university qualified property valuers providing property valuations from $175 inclusive of GST throughout Sydney. Our teams of senior valuers are all practicing valuers licensed to value property throughout NSW without limitation.
Our valuers are proud to offer clients independent property valuations and property valuation services. All our property valuers are familiar with and will take the time to work you through the valuation process if necessary, to ensure you are completely happy with our property valuation service. All our property valuers abide by a Code of Professional Practice, Code of Ethics and Rules of Conduct.
Property Valuers provide solutions to all types of property valuations, and are a convenient service for Property Valuation Professionals and their clients.
Property Valuers provide independent valuations and act in YOUR best interest.
General Information:-
There are three general groups of methodologies for determining value. These are usually referred to as the "three approaches to value"which are generally independent of each other:
* The cost approach
* The sales comparison approach
* The income approach
However, the recent trend of the business tends to be clinging to the scientific methodology of appraisal which relies on the foundation of quantitative-data, risk, and geographical based approaches. Notwthstanding the above a review on the methods used in the industry by comparison between conventional approaches and advanced ones is the general approach.
The appraiser at OZ Property Valuers using three approaches will determine which one or more of these approaches may be applicable, based on the scope of work determination, and from that develop an appraisal analysis. Costs, income, and sales vary widely from one situation to the next, and particular importance is given to the specific characteristics of the subject.
Consideration is also given to the market for the property appraised. Appraisals of properties that are typically purchased by investors (e.g. - skyscrapers) may give greater weight to the income approach, while small retail or office properties, often purchased by owner-users, may give greater weighting to the sales comparison approach. While this may seem simple, it is not always obvious. For example, apartment complexes of a given quality tend to sell at a price per apartment, and as such the sales comparison approach may be more applicable. Single family residences are most commonly valued with greatest weighting to the sales comparison approach, but if a single family dwelling is in a neighborhood where all or most of the dwellings are rental units, then some variant of the income approach may be more useful.
The cost approach
The cost approach was formerly called the summation approach. The theory is that the value of a property can be estimated by summing the land value and the depreciated value of any improvements. The value of the improvements is often referred to by the abbreviation RCNLD (reproduction cost new less depreciation or replacement cost new less depreciation). Reproduction refers to reproducing an exact replica. Replacement cost refers to the cost of building a house or other improvement which has the same utility, but using modern design, workmanship and materials. In practice, appraisers use replacement cost and then deduct a factor for any functional disutility associated with the age of the subject property.
In most instances when the cost approach is involved, the overall methodology is a hybrid of the cost and sales comparison approaches. For example, while the replacement cost to construct a building can be determined by adding the labor, material, and other costs, land values and depreciation must be derived from an analysis of comparable data.
The cost approach is considered reliable when used on newer structures, but the method tends to become less reliable for older properties. The cost approach is often the only reliable approach when dealing with special use properties (e.g. -- public assembly, marinas).
The sales comparison approach
The sales comparison approach in a real estate appraisal is based primarily on the principle of substitution. This approach assumes a prudent individual will pay no more for a property than it would cost to purchase a comparable substitute property. The approach recognizes that a typical buyer will compare asking prices and seek to purchase the property that meets his or her wants and needs for the lowest cost. In developing the sales comparison approach, the state licensed real estate appraiser attempts to interpret and measure the actions of parties involved in the marketplace, including buyers, sellers, and investors.
Method of Data Collection Data are collected on recent sales of properties similar to the subject being valued, called comparables. Sources of comparable data include real estate publications, public records, buyers, seller, real estate brokers and/or agents, appraisers, and others. Important details of each comparable sale are described in the appraisal report. Since comparable sales are not usually identical to the subject property, adjustments may be made for date of sale, location, style, amenities, square footage, site size, etc. The main idea is to simulate the price that would have been paid if each comparable sale were identical to the subject property. If the adjustment to the comparable is superior to the subject, a downward adjustment is necessary. Likewise, if the adjustment to the comparable is inferior to the subject, an upward adjustment is necessary. From the analysis of the group of adjusted sales prices of the comparable sales, the state licensed real estate appraiser selects an indicator of value that is representative of the subject property.
Steps in the Sales Comparison Approach
1. Research the market to obtain information pertaining to sales, listings, pending sales that are similar to the subject property.
2. Investigate the market data to determine whether they are factually correct and accurate. 3. Determine relevant units of comparison (e.g., sales price per square foot), and develop a compararive analysis for each.
4. Compare the subject and comparable sales according to the elements of comparison and adjust as appropriate.
5. Reconcile the multiple value indications that result from the adjustment of the comparable sales into a single value indication.
The income capitalization approach
The income capitalization approach (often referred to simply as the "income approach") is used to value commercial and investment properties. Because it is intended to directly reflect or model the expectations and behaviors of typical market participants, this approach is generally considered the most applicable valuation technique for income-producing properties, where sufficient market data exists to supply the necessary inputs and parameters for this approach.
In a commercial income-producing property this approach capitalizes an income stream into a value indication. This can be done using revenue multipliers or capitalization rates applied to the first-year Net Operating Income. The Net Operating Income (NOI) is gross potential income (GPI), less vacancy and collection loss equals (Effective Gross Income) less operating expenses (but excluding debt service, income taxes, and/or depreciation charges applied by accountants).
Alternatively, multiple years of net operating income can be valued by a discounted cash flow analysis (DCF) model. The DCF model is widely used to value larger and more expensive income-producing properties, such as large office towers. This technique applies market-supported yields (or discount rates) to future cash flows (such as annual income figures and typically a lump reversion from the eventual sale of the property) to arrive at a present value indication.
$175
Stamp Duty Valuations
(02) 9361 3984
Valuations
Residential, commercial and industrial
Pre-purchase/sales
Probate
And more
Other Services
Land and environmental matters
Feasibility studies
Court appearances
And more
�2005 252A Moore Park Road / Paddington Sydney NSW 2021 / Ph: (02) 9361 3984 / Fax: (02) 9361 3983
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