Estimate real estate: monetary value

Estimate of real estate on line

Real estimate

To carry out a real estimate consists in appreciating the value to which a real estate is saleable.

For monetary a value estimate carried out by one of our experts with legal expert report having authenticity, contact us for a personalized estimate...

Reasons for the estimate

Several reasons can encourage to estimate the value of a building :

• in the event of divorce,
• in the event of succession,
• to prepare a change (transaction),
• to finance or refinance the building,
• to carry out acts of management (to ensure the building in value nine, to give a description of the value of its own goods within the framework of a healthy management, to determine the price to which one will rent the building),
• to pay its taxes or to check their founded good (transfer taxes, taxes land on the built properties),
• to annually declare the value of a real wallet registered out of Stock Exchange,
• to defend its rights in justice.

The price of the buildings controls, beyond the investment, the life of the people, the institutions and the states. Contrast is seizing : on a side, a major risk for the savings in mesevaluation, other, practices too often antiquated of estimate of the prices. The phenomenon is still amplified by the multitude of the forms of analysis.

Principal methods

Which method is capable to evaluate, i.e. " to capture " effectively and usefully the value of a real credit ?

A real evaluation can be done according to three approaches :

1. The comparison of the prices charged on the market for similar goods.
2. The actualization of the future profits générables with the good.
3. The calculation of the replacement cost depreciated of the good. This approach is appropriate in particular for the buildings of single use or out-market (schools, museums, factories…).

Difficult, the operation is generally entrusted to a specialist (expert real estate in France, appraiser approved in Quebec) who will take into account certain given and will use four great methods which are applications of the three preceding approaches.

Data taken into account

1. Physical data. They milked essentially with the nature of the building and its immediate environment :

• current and potential destination (use),
• dimension of the ground, livable surface of the building, surfaces corrected, etc.
• architectural quality, beauty, quality of materials, balance of the unit,
• state of maintenance,
• adaptation to its destination (level of internal comfort, existence of external harmful effects…),
• site,
• vicinity.

2. Legal data. In France, they are essentially three :

• the COS or percentage occupied time of the grounds which determines the maximum number of m² constructible, which influences the value of the ground additional clause a rebuilding,
• mode of occupation of room (law of 48, dwelling, offices, etc),
• limitations granted to the right to alienate (urban right of pre-emption, the farmers and the SAFER).

S’adds the concept of " scrap value " retained by the creditors in the case of seizure of property in front of the Court of Bankruptcy and equivalent to approximately 75 % maximum of the monetary value.

3. The economic situation. They are a function of the importance of the market and its evolution :

• general economic economic situation : economic dynamism, interest rate, etc.
• economic situation specific to the real estate : surplus or shortage of spaces of the analyzed type, future prospect, etc.
• local economic situation, etc.

Four great methods of expertise

In practice, the expert uses simultaneously several methods in order to recut the results of them but it is necessary to keep in mind that, as there is not undeniable contract price, there does not exist undeniable expertise. In the case D’an estimate before " sale with the bar " or by seizure of property in front of the Court of Bankruptcy, L’expert establishes a " scrap value " generally equal to 75 % of the value of market.

• By comparison - monetary value:

It consists in comparing the building with other buildings in the same way standard having been the subject of recent transactions, expertises, decisions of court or of decisions of the tax authorities. By analogy one deduces from it the " monetary value " or " value from market ".

• By actualization of the incomes:

It consists, starting from a generally known income with precision, to go up towards the capital. The income more often depends on the circumstances and the payments that value of the building. Moreover, the " usual output " or " up-dating rate " which can appreciate itself only by comparison, this method constitutes to a certain extent a method by comparison.

• By estimate of the depreciated replacement cost:

It consists in estimating the replacement cost of the building (equivalent at the cost of rebuilding minus functional disuses observed) and applying to the result a coefficient of outdatedness. One adds the value of the ground considered vacant and according to his optimal use. The result of this method is all the more precise as the building is recent. To obtain a true value of market following this method, it is necessary to hold account of all disuses, in particular economic disuses.

• By indexing:

It can be practised when, in a relatively close past, an estimate was drawn up in a sufficiently credible way by a sale, another expertise, a decision of court, a payment of back taxes etc… This value is indexed according to the trend of the prices of the similar real goods.