The Comparative Approach Ing David Slavata Ph D

The Comparative Approach Ing. David Slavata, Ph. D. Property Valuation

Principle l It is necessary to have at least two real estates with nearly no differences (flat A, flat B) l Flat A (valuated) the unknown price, the other especially technical and legal parametres are known l Flat B (comaprative) known price, known technical and legal parameters

Methods l Direct comparative l Professional balance sheet l Using the direct increases and reductions l Using the coefficients l Direct with no representative l Undirect with representative estate

Example Valuate multiflat house in the village of Svatoňovice by comparative approach. Built from bricks, insulated. In the house there are 4 similar flats 2+1. Appartement area 57 m 2. No balcony. Use the comapartive methodes. The year of construction: 1963.

The advertising database Flat č. Locality Rooms Price Techn. condition 1 Velké Heraltice sádek 2+1 390000 - 2 Vítkov 3+1 650000 + 3 Vítkov 2+1 580000 + Appreci ated flat Svatoňovice 2+1 ? -

Professional balance sheet methode CV 1 = 1/n x SUM SPi

Comparative Value Flat Locality Rooms Price 1 Velké Heraltice sádek 2+1 390000 2 Vítkov 3+1 650000 3 Vítkov 2+1 580000 Comparative Value correction 0, 85

Advantages and disadvantages l Simple methode l Assumption of high homogenity of flats l Timeliness l Sample of usage: Flats for instance

Methode of comparison, 1. Direct. Using of increases and reductions due the diferences between valuated and comparable flats. 2. Using the coefficients express of differences.

Direct methode using increases and reductions CV 2 a = [(SPA +/- sum IRAi) x W 1 + (SPB +/ -sum. IRBi) x W 2 +…. +(SPX +/- sum IRXi) x W z] / W 1 + W 2 + … + W z

Advertising database Flat č. Locality Rooms Price Techn. condition 1 Velké Heraltice sádek 2+1 390000 - 2 Vítkov 3+1 650000 + 3 Vítkov 2+1 580000 + Appreci ated flat Svatoňovice 2+1 ? -

Calculation CV = (+390 x 0, 85 + 50 +0 + 39 +650 x 0, 85 – 100 – 50 +580 x 0, 85 - 100 + 0 – 50) / 3 CV = Kč/flat

Using the coefficients express of differences CV 2 b = sum ISPCi / n ISPCi = SPi / Idi = k 1 x k 2 x k 3 x…. . x kn

Procedure 1. 2. 3. 4. 5. 6. To get the database with the comparative fltas as homogenuos as possible. The bid prices of flats should be corrected by the reduction coefficient. Selection of signs of differences should be set the coefficients of differences (k) By multiplicating of coefficients we get the Indexes of differences for each comparative flat. The selling price should be devided by the Index of difference for each flat. By the average of adapted selling prices we get the comparative value of the flat.

Sestavení databáze Flat č. Locality Rooms Price Techn. condition 1 Velké Heraltice sádek 2+1 390000 - 2 Vítkov 3+1 650000 + 3 Vítkov 2+1 580000 + Appreci ated flat Svatoňovice 2+1 ? -

Creation of coefficients K 1………. . Rooms K 2………. . Locality K 3………. Technical condition

Value of coefficients K 1: 2+1……. . 3+1……… K 2: Svatoňovice. Vítkov……. . Sádek……… K 3 Standard… -…………… +………… 1, 1 1, 00 1, 12 0, 90 1, 00 0, 90

Calculation I Price Č. Cena Korekce 0, 85 1 390 331, 5 1, 00 … … 2 650 552, 5 1, 12 … … 3 580 493 1, 00 … … K 1 K 2 K 3 Comparative Value …

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