It is important to know the meaning of term Residential Property Valuation. For housing purpose only residential area is used than for industrial or commercial purposes. The valuation of housing property is necessary in conditions like loan purpose, buying and selling, market valuation, refinancing, settling of legal issues, family law and collection of stamp duty.
The valuation of the residential property is done to have an exact idea of the value of the property to buyers and sellers on which both the parties can experience a best deal. The property valuation is done by an expert, knowledgeable, experienced and government approved professionals to get the real worth in any part of India.
As buying and selling of property is a burdensome task as one has to go over the copious procedures and submission of several documents at government offices. This process will indicate about the banks and location in which they prefer to give loans within their permissible boundaries of their branches. It will help the buyers in knowing the real value of the property and the amount of loan they can have on it. The potential buyer will not be able to get loan without the valuation of domestic property.
The valuation will clearly indicates about the geographical location and the nature of the property. It also mentions whether the property is used for domestic, agricultural, commercial or industrial purposes. It is also used in settling the disputes of property shareholders, in divorce cases and in the division of property.
A land on which housing prevails can be termed as residential area and this includes mobile homes, joint family housing and nuclear family housing.
Importance of Residential Property Valuation
Valuation gives an accurate idea about the property worth that will help in knowing the value of the property before buying or selling. A standard process is being followed by the government approved valuers. The clients are related to the fields from corporate, non-government sector, government, business or individuals. We provide various professional services of valuation.
Approaches used in the process of Valuation
The various number of approaches are used by the valuation analysts to determine the reasonable indication of a defined value on a particular date. Some common approaches are used estimation of fair value of the intellectual property given below:
- Cost Approach: This approach is based on the economic principle of ‘substitution’. This method ensures that the investor has not required to pay not more than the cost of constructing or purchasing, obtaining, a substitute credit of equal profit.
- Market Approach: This method is based on the economic principle of equilibrium and competition. In a market with freedom and without restrictions, the demand and supply factors will calculate the price of a service at the point of equilibrium. It will provide a value at which willing buyers and sellers will agree to exchange the property.
- Income Approach: By discounting the economic benefits of ownership in future at an appropriate rate of discount, one can reach the fair value of a property.
- Direct Approach: This approach is based on the present value of shares pf a fair property.
Valuation lies within the sphere of economics, law and engineering. Most of the valuers belongs to the background of engineering after the retirement from engineering services. Only few have learnt the valuation as a subject in addition to engineering. The government approved valuers are a team of professional lawyers, engineers and chartered accountants. They does valuation of property, buildings, capital tax etc. They will check the income that is generated by the industry and it is free from any legal disputes.