Property Valuation of marketable real estate in terms of technology
Why does a bank need to estimate real estate?
nearly any bank issues secured loans, so there can be a lot of objects of this type. For a bank, Property valuation is fresh insurance in case of unlooked-for situations, and for a customer, it’s an occasion to admit a large loan quantum, occasionally indeed at lower interest rates. For the correct computation of the loan quantum and its other pointers, each contributory object undergoes an assessment procedure- determining the request value of the object. In our case, marketable real estate will be considered.
Valuation of marketable real estate is generally carried out by one of two styles( or a combination of them)
1. relative approach with this approach, the request value of an object is determined by comparing current offers on the request. For illustration, on a point with offers to vend marketable real estate( for illustration, Cyan or Avito), an reviewer selects the most analogous parcels- generally from 3 to 6 analogues, and compares them.
2. Income approach with this approach, the request value is determined as the implicit income from the operation of this object. It analyzes the attractiveness of the position of the object, the price for renting analogous objects on the request and other characteristics that affect the profitability of marketable real estate. Grounded on the analysis, the request value of the object is displayed.
When assessing marketable real estate, the duration of this process plays an important part the slower the reviewer performs his task, the longer the decision to issue a loan is delayed. This, in turn, increases the liability that the client will go to a contender. The speed of evaluation in this area is of great significance the briskly the bank works with objects, the more it’ll appreciate them. Consequently, the further loans it’ll issue the impact on business then’s the most direct.
IT results for automatic assessment In different countries, the real estate request is developed inversely, so all opinions on automatic assessment directly depend on the request within which the development was carried out. thus, we will consider only tools for the analysis and automatic assessment of real estate, which are presently available in Russia.
Then are the main factors we’ve linked for the perpetration of real estate valuation models
• the quantum of data available;
• historicity of available data;
• data quality;
There are relatively a many companies on the Russian request whose Property valuation quality is at a high position( for illustration, SRG or Mobile Appraiser), and real estate hunt services, similar as Cyan, continue to laboriously develop this area. In addition, indeed some banks have their own developments. All these results are developed on the base of a large quantum of literal data on the trade of real estate.