Real estate businesses need an appraiser and real estate experts

A property hasn’t a single value, but depends on the purpose for which the evaluation report is done, in this regard being able to do more estimates, which do not necessarily have the same values, the market price for trading or the estimation of the market value for ensuring a credit, or the estimation of the insurance value or of the taxing are different.

The estimated value of an appraiser is not equal to the price. The price is always the result of the transaction; the value is the expert’s estimation who analyzes the real estate market specific to the evaluated property. The service provided by an expert is a service of credibility, of certification, of insurance. The evaluation is a form to apply several methods to give confidence to the beneficiary that that value is close to the exact value.

In real estate any purchaser, any guarantor, any person involved in preserving the value of a real estate property is interested to find a value close to the maximum probability. This service is an intellectual service that gives credibility to those who are involved in a complex process: of trading, of sale, of guarantee. As the number of transactions is higher, so the services of an appraiser are absolutely necessary, said a real estate expert.

The evaluation process is closely linked to the market price. The evaluation is essentially a consequence of how that transferable security is seen on that market. If the market is weak, is shrinking, if it has an insecurity of any kind, then that value will be low. If that company is in a lively market, it will be overvalued given subjective reasons and then the value is subjective beyond certain technical parameters, which depend precisely of the activity of the market.

When it comes to capital markets you evaluate the transferable securities that sit behind the capital, the shares, when it is evaluated the real property is the value of the full transfer right of the proprietary right.

A very common practice seen in Western countries is that by which the value of a company of a real estate field is set based on real estate assets that it holds and on the potential of these assets. These evaluations help mainly investors to understand better how to invest their money, what is worth what they are buying today and which is the growth potential in the future.

Most real estate developers believe that appraisers are pillars of transactions, because if bankers have doubts clearly they will eliminate these by calling to the services of an appraiser. If the seller has doubts he will attenuate these by calling to an appraiser. In the US, since the early ‘94 no transaction was made without following a logical sequence: firstly, appraisers say the price of a property. Until there wasn’t this evaluation report nor the banker or investor, no one entered into transaction.