How to evaluate a house and land: tips for self-evaluation and choosing experts.

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Unlike the standard apartment layout, individual residential buildings (also called cottages) have a unique architecture. Therefore, assessment is a more extensive type of work. As a rule, two objects are assessed - a house and the land under it, a personal plot. The assessment of a residential building is carried out both with a land plot and outbuildings, and without them. It all depends on the specific goals of the owner.

Valuation of a residential building (cottage) is the objectively determined market value of the building. To evaluate a house, experts take into account more parameters, not only usable area and location. As a result, the owner receives an official document - a report on the assessment of market value, necessary for purchase and sale, legal disputes, registration of bank collateral, etc.

In what cases may the service be required?

The main cases in which it may be necessary to carry out appraisal work on residential buildings with land plots:

• When transferring property for inheritance
• When making purchase and sale transactions
• During the mortgage process
• When submitting an application to the embassy
• When assessing property for guardianship and trusteeship authorities
• For privatization or insurance of a residential building with adjacent land plots
• In various types of litigation

This is not a complete list of possible situations. But we will be able to make a quick and objective assessment in any case.

What does the assessed value affect?

The appraised value of the property has a direct bearing on the application of certain lending conditions, in particular, it may affect the amount of the mortgage loan, the maximum term of the mortgage and the interest rate. If the real value, according to the assessment, turns out to be lower than the market value, the borrower will most likely not be able to receive the amount he expected. However, in this situation you can try to do the following:

• make a request for a re-evaluation;
• make a second expert assessment in another company (but this will entail additional costs);
• provide the credit institution with additional collateral;
• apply for a consumer loan for the missing amount.

The period for assessing and drawing up a report on real estate purchased with a mortgage is 3-5 working days.

What is the evaluation criterion?

The main criterion when carrying out assessment activities in this case is the price level characteristic of the regional market. But you need to keep in mind that completely identical objects simply do not exist. The appraiser must take into account criteria such as:

• Location of this object
• The degree of its distance from the center
• Transport accessibility
• The degree of prestige of this microdistrict
• Providing the facility with engineering communications
• Operational parameters of the facility at the time of assessment
• Quality of finishing work
• Living space
• The area of ​​the adjacent land plot, its category, as well as its purpose

In some cases, it may be necessary to take into account other factors that may affect the results of the assessment work.

The essence of the procedure

Estimating the value of a home is the steps that need to be taken in order to find out its current market price.

If you need to sell your home, you can set the price yourself. In this case, you will be guided by the average market value of real estate with similar parameters. If you have a specific buyer in mind, you will negotiate with him until you come to a price that you both like.

So why do you need a complex home appraisal process? For those cases when you need to know the value of real estate not in order to sell it.

Legal entities and individuals who meet the following conditions can act as appraisers:

• Membership in a specialized self-regulatory organization (SRO);
• Availability of a civil liability insurance policy in an amount exceeding 300,000 rubles;

SRO is a non-profit association of enterprises. The formation is based on a professional or territorial community. The activities of SROs are controlled by the state.

Payment to the expert should not be a percentage of the resulting cost. Write down a fixed remuneration amount in the contract. This will protect you from overestimating the cost by an unscrupulous expert.

To order a real estate appraisal, you will need to provide the following documents:

• Passport of the owner of the house or the customer of the examination;
• Documents that confirm that the house is your property;
• Documents for the house from the BTI (Bureau of Technical Inventory);
• Documents about the restrictions imposed, if any.

The land on which the house is built is assessed separately. This is what the cadastral examination does. It requires other documents characterizing the land plot you own.

Read also: cadastral valuation of land

In practice, it often makes sense to carry out these two processes in parallel, since almost every suburban area is a complex property, which includes land, a residential building, outbuildings, and a green area. This article is devoted specifically to the assessment of residential suburban real estate.

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What documents must be presented during the assessment?

The owner of the property being assessed needs to keep in mind that he will need to present a certain package of documents, usually consisting of:

1. Title documents for this building and site
2. Cadastral passport of a plot of land
3. Technical passport from BTI, explication and floor plan
4. Death certificates of the previous owner (in case of inheritance)
5. Passports of a citizen of the Russian Federation.

In some cases, you may need to provide some additional documents.

The list of documents is quite large. Conducting an independent assessment is a fairly costly and time-consuming process. Therefore, many people prefer to seek help from specialized companies that will help overcome all bureaucratic obstacles.

An additional difficulty in carrying out the procedures is that it requires an assessment of not only the building, but also the plot of land

When is a house and plot appraisal needed?

It is required in different cases. This document is needed:

1. To formalize the purchase and sale agreement and certify the transaction by a notary with payment of the state fee;
2. In case of resolving disputes and defending their interests in court, including when a transaction is declared invalid;
3. When dividing jointly acquired property in the event of a divorce in court;
4. When buying a house with a mortgage and registering the same real estate as collateral with a bank, an expert assessment is required;
5. When applying for a large loan for any purpose with collateral in the form of collateral of your own real estate;
6. In case of sale of collateral by the bank and foreclosure of the mortgaged property.
7. The amount of the state duty for payment to the budget when performing notarial acts upon entering into an inheritance depends on this amount.

In any case requiring documentary evidence of the assessment, experts take into account a huge range of different factors.

Evaluation report

The real estate inspection report is prepared in writing. The pages are numbered, the report is stapled, certified with a stamp and signature of the SRO representative. The report averages thirty pages.

The document contains the following information:

• information about the expert and the customer;
• information about methods for assessing housing;
• information about the house being inspected;
• real estate market analysis;
• identification of the market value of the object.

The report for the bank when applying for a mortgage loan contains:

• documentation for housing;
• photographs taken during the examination process;
• market price of real estate;
• liquidation value (the amount for which the bank will be able to sell the house if the borrower fails to fulfill its obligations).

If the bank client independently chose an appraisal company, additionally the following should be attached to the report:

• Diploma in Evaluation;
• document confirming membership in the SRO;
• civil liability insurance policy.

ADVICE! The assessment customer needs to carefully study the expert’s completed report while in the company’s office. This will help you quickly resolve possible issues and understand the nuances.

What types of property valuation exist - TOP 5 main types

A market economy involves transactions between owners based on the market value of goods and work. To initiate a contract, the owner first needs to find out the real price of the property. Due to the demand for such a procedure, the number of companies engaged in independent examination is also increasing.

But it needs to be assessed as a pigsty, and not as a living space!

Experts make conclusions taking into account the variety of aspects of the type of activity. Let's look at the most common types of assessments.

Type 1. Valuation of real estate

One of the most common services.

There are several categories for this type of assessment:

• apartment appraisal;
• land plot;
• industrial real estate;
• home appraisal;
• rent assessment;
• assessment of unfinished objects.

Concluding a real estate quote has a wide range of applications and may be needed in a variety of situations from purchase and sale to determining the assessment of damage to property.

Type 2. Valuation of movable property

Movable property includes: transport and equipment, machines and installations, furniture and office equipment, tools and other tangible assets.

To correctly determine the cost, not only comparative, but also other approaches are used - profitable, market, investment, cost.

When reviewing the final report, make sure that you have been presented with the main valid rating categories. Depending on the properties, the priority parameters of the property should be presented.

The reporting document includes:

• release and commissioning dates;
• serial and inventory number;
• Warranty and technical inspection (repair) certificates
• intensity of use (normativity).

Type 3. Business valuation

Calculating the value of an enterprise is nothing more than the result of the company’s activities. Business is the same product, only with its own characteristics. Commerce is calculated from the point of view of profitability, investment attractiveness and sales complex.

An estimate is made from the cost:

• controlling stake;
• one share;
• property complex.

The business valuation is determined by the market value method (current income and future profit), the comparative approach (the activities of a similar company are analyzed) and the cost method (the company's expenses are deducted from the assets).
Read more about the features of business valuation in a special publication on the website.

Type 4. Valuation of enterprise property

It is carried out to determine the value of all property involved in the business process. This type of monitoring is often used to improve productivity.

An appraisal of an enterprise’s property is needed to truly reflect its value. The need may arise during competitions, property disputes, changes in specifics, when developing a new concept, or if it is necessary to sell or buy an existing business.

It is imperative to take into account the company’s depreciation charges in the process, as this reduces the cost and reduces the investment attractiveness. This is often done deliberately, in the event of liquidation of the organization.

More information can be found in the publication “Equipment Evaluation”.

Type 5. Valuation of intellectual property

Special article of work. Requires highly qualified specialists, therefore it is not recommended for assessment by commercial organizations.

Once turned into a product, your developments become a fundamental asset of the company and require specialized assessment. Often the idea (intellectual property) exceeds the cost of the entire enterprise! Intellectual property includes franchises and trademarks.

Example High-tech commercial developments constitute a significant share of the market for intercontinental corporations. The valuation of their assets determines the market value of the shares of these enterprises.

The constantly changing stock market of such companies significantly complicates valuation decisions, which is why clients most often resort to the services of independent international agencies.