Differences between estimated value and commercial appraisal

value estimation and commercial appraisal

For people it is important that they know the differences between the different types of appraisals that are counted, this with the purpose that they can learn more and choose the appraisal that suits their needs. Below you can learn more about the estimate of value and the commercial appraisal.

Opinion of value or estimate of value

It is important to mention that the value opinion and the value estimate are similar and what they vary is in the name given to it according to the agency or company where the user requests it. 

The value estimate is used to calculate the sale value of a real estate in a preliminary way, this allows the property to be placed at a price within the real estate market, which is why the market approach is used. 

This approach determines the price through comparables in the area according to the characteristics of the property, this includes the sale price and the history of the operations that have been carried out; on the other hand, the type of construction is also considered, that is, if it is for residential, commercial, industrial use, etc. 

The price of the property is determined based on its quality, that is, if the property is of social interest, medium, semi-luxury, luxury, residential and residential plus and also takes into account the current cost per m2 of the construction, including its special facilities, less the demerit for age, state of conservation and project quality. 

This value opinion or value estimate is made by professional experts which are responsible for analyzing and compiling the information so that the value estimate for a property can be given. 

Benefits of value estimation 

This type of appraisal has the advantage that it has affordable prices, in addition to the fact that this cost is not affected by undue stimuli such as the urgency to sell or speculation. 

Another advantage is that its delivery is faster and determines the sale value in the event that the client only requires this knowledge.

Commercial Appraisals 

A commercial appraisal is used to define the value of a real estate in a technical way and can be used for purposes of knowing the price of a home. or to present it before a notary or trial (if it is done for a trial it is important to mention it to the appraiser so that the corresponding characteristics are taken into account). 

In this case, the appraisers are in charge of analyzing and compiling the information in order to adequately determine the value of a property and three approaches are used: the market approach, specific costs and the capitalization of income. 

On the other hand, to determine the price, comparables in the area are also taken into account according to the characteristics of the property, such as sale prices, rental prices, the history of operations that have been carried out, among other factors. 

Other factors that are taken into account to carry out the commercial appraisal are also taken into account: 

  • Urban equipment factor: This is the set of buildings and predominant spaces for public use, where activities complementary to those of housing and work are carried out and that provide the population with services including social well-being and support for social activities, economic, recreational and cultural. 
  • Land use factor: It refers to the actions, activities and interventions that people carry out on a certain type of surface to produce, modify or maintain it.

The appraisal experts consider the type of construction, that is, if it is for residential, commercial, industrial use, etc. They also determine the price of the property based on its quality and if it is of social, medium, semi-luxury, residential or residential interest, which is determined based on the current cost per m2 of the construction, including its facilities. special, minus the demerit for age, state of conservation and quality of project.

Defines the average value of income that represents a capital for rental, this capital being the real estate value in question and uses the approval criteria to value, that is, that the versatility of a property increases its values: a house with the same characteristics will have a higher valuation as soon as it meets greater security, tranquility and lower maintenance costs. Thus, a house in a closed subdivision has a greater demand (and value) than those on streets outside the subdivision. 

Now that you know the differences between the value estimate and the commercial appraisal, come to our advisers who will provide you with more information about the appraisal you require.

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