Real Estate Appraisal Report
Valuing assets is a task that requires seriousness and competence, whether in the real estate appraisal, personal property or intangible assets of others.
In this activity, the impeccable professionalism and constant technological updating, acquired over the years, leads to the precision, the venal and rental values of the valuated assets, fundamental for a good business.
See some of our services:
Residential, commercial, and industrial real estate valuations;
Land and tracts of land valuations;
Rural, crop and livestock valuations;
Industrial complex valuations;
Machinery, equipment, furniture, and utensils valuations;
What is the Real Estate Appraisal service?
It is the precision and technical basis of the market value of assets or rights over them, which are called intangible. This definition is made within technical and normative procedures for the determination of value analyses.
The material assets are urban, rural, and industrial real estate, vehicles, machinery and equipment, agricultural cultivation, and livestock.
The category of intangibles includes goodwill, lost profits, trademarks, and patents.
Who can perform Real Estate Valuations?
The real estate appraisal forms an extensive professional field reserved for engineers and architects specializing in the field of economic and valuation engineering.
The Resolution No. 218 of CONFEA establishes the professional attributions of the engineer, architect and agronomist engineer in the several modalities and, according to the Resolution No. 345 of CONFEA, are of private attribution of the engineers – in their several specialties – of the architects, agronomist engineers, geologists, geographers and meteorologists, duly registered in the Regional Councils of Engineering, Architecture and Agronomy – CREA.
The activities of surveys, expert evidence, valuations and arbitrations relating to personal property and real estate, as well as its integral parts and belongings, such as machinery and industrial facilities, works and services of public utility, natural resources and assets and rights that, in any case, for their existence or use, must be attributed to those professions.
What is the purpose of the Real Estate Appraisal?
It is the technical determination of the value of a real estate or a right over it, employed in a variety of situations, within and outside the judicial scope, such as, inventories, dissolution of a company, transactions of purchase and sale, rent, collection of taxes, insurance, mortgages, studies of real estate dynamics and others.
What type of urban real estate can be the object of a valuation?
Land for residential or commercial purposes, developable tracts of land, houses, apartments, commercial premises, or industrial buildings can be valued.
What should the Valuation Engineer know?
In order to make a good valuation, the professional must know not only the mathematical tools involved in the calculation, but also the functioning of the market where the real estate is located.
What is the best way to valuate a real estate?
There are several methods to find the market value of a property.
The best way is direct comparison with data from similar real estate transactions carried out at the same time you need to find the value. This is not always possible, especially when it comes to individual real estate, such as large commercial and industrial buildings. In these cases, other methods should be applied.
What is the value of an asset?
One of the fundamental aspects in Valuation Engineering is the understanding of the concept of value.
Avalor Engenharia studies the mechanisms of formation of the values of an asset, relating the different aspects of the question. Only with the preliminary understanding of the phenomenon, the professional will be able to seek its quantification.
There are various definitions and interpretations for value, market value and price.
What is the difference between value and price?
The value is intrinsic to the asset and depends on the market variables, the environment and the techniques adopted to determine it. It assumes a business situation between the two parties involved, so that there is no external pressure on them.
The price depends on the business situation, personal and commercial interests of the people and institutions involved in the process, and it does come under external pressure.
It should be remembered that the value is unique, for a given time and market situation. The Standard says: “The value to be determined always corresponds to that which, at a given moment, is unique, whatever the purpose of the valuation. This value also corresponds to the price that would be defined in a market of perfect competition…”.
The value is not a characteristic of the asset to be valuated, it can vary, but if we consider a certain moment, it is unique.
The price, on the contrary, is multiple, varying in a range according to the agents of the negotiation and also subject to short-term fluctuations, such as those resulting from economic situations, advertising campaigns, new ventures or the prospect of changes in legislation.
The numbers obtained in the transaction surveys actually consist of a price range, in which average or “most likely value” is what we call “market value”.
Why hire a Real Estate Appraisal company?
To obtain a clear and exempt notion of what the assets are really worth, as well as to act in the various situations where value determinations are required from someone who is not directly involved in the business.
The real estate appraisal is also provided for in law for some situations, such as revaluation of fixed assets and conciliatory expert opinions. It is recommended that you always seek a correct valuation of a real estate so that, after knowing its value, it can be offered for sale or rent.
What are the ways to valuate an asset?
The best way is by comparison with similar real estate, known as the Direct Comparison of Market Data method.
This is the best method for real estate appraisal, but it depends on the existence of transactions of the same type of real estate, at the same time and spatial location, and in sufficient quantity to enable the analysis of the values.
The values of transactions with similar real estate are the greatest market evidence for another real estate. If there is data, an average value must be obtained. Generally, it is a weighted average since real estates are always different from one another.
It is not possible to simply extract the arithmetic average. This average can be made by approximation or “to the feeling”, if it is an valuation within the level related to the Technical Opinion, by homogenization of factors, if it is at the Normal level or by statistical inference, for the level of Accuracy and Rationale I, II or III.
The method is based on the analysis of information on property prices comparable to the one being valuated. Appraisers need to check the conditions under which transactions are made to verify that prices are not deviating from the market.
According to the valuation standard (NBR 14653), a valuation may be classified in one of the following degrees of Rationale and Accuracy: I or II or III.
What are the other valuation methods?
In the absence of data for comparison, the methods of Income, Residual, Involutive and Cost of Reproduction can be used, which seek the value through other evidence. These are approaches to be used only in case of need.