Property valuation

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Updated: 14 July 2020

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Provided by: bonyang

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Title: Property valuation

1
PROPERTY VALUATION

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WHAT IS PROPERTY VALUATION?

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WHO NEEDS PROPERTY VALUATION?

(1) Buyers
To know the market value of the property to avoid
overpaying
(2) Sellers
To avoid settling for less than the market value
of the property
(3) Lending institutions
To ensure that the property given as security has
enough value to cover the loan facility being
advanced
(4) Tax authority
To determine the tax liability related to a
property.

4
PURPOSES OF DOING PROPERTY VALUATION

(1) Collateral
When a property is to be used as collateral to
secure loan
(2) Mortgage
When a mortgage is to be extend for property
acquisition
(3) Disposal/Sale
To establish the market value of a property
(4) Insurance
To establish the actual market value for
insurance principal value and premium
determinations

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(5) Book/Audit/Balance Sheet
To establish the value to reflect in the books of
account as the value of a property
(6) Taxation
To help in establishing the tax obligation
relating to a property
(7) Stamp duty
To establish the value for purpose of calculating
stamp duty when ownership is moving to another
person

7
FACTORS AFFECTING PROPERTY VALUATION
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(1) Location
A property located in a remote place will attract
lesser value as compared to a similar one in a
developed place like market centres or towns.
(2) Size
The smaller the property the smaller the value
and the larger the property, the bigger the
valuer.
(3) Age of the property
A new property will fetch more value as compared
to an older property. The age helps to determine
the remaining useful years of the property.

(4) Condition
The condition like new, old, damaged, repaired or
not, well maintained or poorly maintained. All
these affect the value.
(5) Demand supply
The higher demand the higher the value and vice
versa. The less available the property is, the
higher the value and vice versa.
(6) Economic outlook
During economic recession or hard time, the
property value will come down as compared to when
the economic is booming and there is money in
circulation.
(7) Income
The more income the property is generating, the
higher the value of the property.