Value lies in the eyes of the beholder

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To get an idea, engage a valuer empanelledwith a professional body Sachin Sandhir For a majority of citizens residentialproperty represents their single largest financial commitment. Built with huge sums ofhard earned money, homes are something that every individual takes pride in,which is often reflected through notional value. To get information, peoplewill have discussions about the same in their social circles, among family andrelatives. These create speculation and curiosity amongst people, even who haveno intention to sell, to know what their property is worth. While people tendto use the terms price, worth, and value interchangeably, these differ inmeaning and implication. The price of a property may not necessarily reflectvalue, which is governed by various other factors and considerations.Therefore, when selling, it is essential to determine the value of property. An informal and simple way to determine value is to approacha real estate agent , who provides comparative data on similar properties thathe has transacted in and the rates at that point in time. However, this valueis only an estimate and should not be considered as the `market value'. In order to get a true picture of all economic/financialaspects of a particular property, it is advisable to engage a valuer,empanelled with a professional body, to determine the `market value' of theproperty. RICS accredited valuers carry out credible valuations based on theRICS Red Book of Valuation Standards and are, therefore, considered as the markof professionalism worldwide and across India. Valuation is a soft science involving high level of judgmentwhere different assumptions lead to different values. Considering the risksassociated with valuation tasks, meticulous application and specialised skillsare required, which come at a cost --the cost of a valuation report. Therefore,this approach should be adopted when seriously considering sale of yourproperty, as the stakes are high and the accuracy of the `market value' willdetermine your financial gains. A professional valuation, backed by consistentvaluation standards, is a thorough exercise conducted by a competent valuer whowill spend time collecting data, inspecting the location and property and athorough due diligence of all important legal, economic and financial aspects.Some aspects that form part of a professional valuation and which willsignificantly impact the property values include: Freehold and leasehold propertyLand value : Thisforms a major component of the overall property value, the extent to whichverification of land records and title deeds was incorporated as part of thevaluation report, is laid down in the `scope of work' and `assumptions' forestimating the market value. As is: The value of the property in the "as is"state Highest and best use: This is the process used to determine property usewhich is legal and yet produces the highest value for land Cost approach: Thevalue of the building is based on how much it would cost if one was toconstruct the property today; this approach is more relevant and applied incase of newly built properties Sales comparison approach: A comparison of the purchaseprices of similar properties that were sold in the recent past is considered;upon data collection, upward/downward adjustments are made, to account fordifferences in year built, construction quality, condition of the property;attractiveness of location, lot /apartment size, available facilities and othersuch factors Given the level of activity in the residentialspace , it isessential to institutionalise valuation standards. These coupled with higherprofessionalism in this practice, I am certain will ensure that valuation ofland and properties will no longer be artificially inflated and this willcontribute significantly in containing land prices, which are very importantwhen it comes to providing homes at affordable prices. The author is ManagingDirector and Country Head, RICS India   Courtesy: HT Estates 20th Feb 2010 For more information regarding apartment in gurgaon, bedroomapartments, buy property in india, commercial complex in india, commercial realestate, commercial space in gurgaon, dealers, flats for sale, indian realestate investment, investment options in real estate, luxurious flats, malls,office space, office space in gurgaon, online real estate, penthouses gurgaon,plots, property consultants, property in gurgaon, property india, propertyinvestment, real estate company, real estate developer, real estate gurgaon,real estate in india, real estate investment strategies, real estate market,real estate news, real estate portals, realtors, realty, residence, residentialreal estate, sell property, shop, villas, Residential Apartment   Visit    www.zameen-zaidad.com             www.propertycafeteria.com      

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