Philippines condoned the IVSC appraisal criteria for estimation and estimation of real estate property under the frame of reference of the Philippines laws. Real estate enthusiasts use it as a standard for valuing land based properties.
frequently practiced methods under this context are :
Sales Comparison approache : in this procedure theevaluator inquires data in connection with the freshly sold houses in that vicinage to use that information as a benchmark. The appraiser uses the data to find value patterns and trends in the market. The valuator also accumulates data about other buyer profiles,scope of time on the market, number of identical cataloged properties available during this time. These value are used by the agent to valuate a market estimate. It is one of the most universal approaches to real estate market valuation. And it holds good for residential properties.Thismethod is usable to all kinds of real property. However it is not firm for commercial properties & it does not hold firm when market is fragile and there is insufficient market transactions.
Cost Approach : In this approache a purchaser of a real estate should not pay more for a property than the cost of switching it with an equivalent property minus the applicable depreciation.Three methods are used practically in this method.They are:
Reproduction cost method : This method is suited when the cost of a latest equivalent asset is more than the cost of forming a clone of the subject asset,
Replacement cost method: it involves valuing the price that a market investor would pay and the exchange cost is corrected for physical diminish and all appropriate 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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