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Real property appraisal - essential part based similarities and differences Kaarel Sahk, lecturer...
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Transcript of Real property appraisal - essential part based similarities and differences Kaarel Sahk, lecturer...
Real property appraisal - essential part based
similarities and differences
Kaarel Sahk, lecturer Estonian University of Life Sciences
European Real Estate Society
19th Annual Conference 13th-16th June 2012
Abstract While we think about real estate, it is quite common to limit
with land or buildings. Other way, while we are speaking about real property early, then beside the land and buildings we commonly imagine not only finance or the bundle of rights but also the essential parts like forest, structures, and landscape are eligible. The lastly named diversification points us attention that we can draw down a nomenclature of different things that should be valued or their value, metric or non metric as a component will influence the estimated value. The last approach explains that some components, things, are non metric and they are described under some different circumstances like emotional, natural, social, etc. types of values that are not the common characteristics enclosed into the real estate value. The named situation, linked with the other contemporary situation of valuation which must account sustainability as a generic name, or energy efficiency, green etc, as its extensions, supply us with the huge multiplicity of resolutions that includes the both, similarities and differences.
Keywords: essential part, real property, metric and non metric, types of values
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Legal definiton based issue
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Detailed
OverallPROPERTY
REAL ESTATE
ESSENTIAL PARTS LAND
REAL PROPERT
Y
BUNDEL OF THE RIGHTS
BUILDINGS STANDING WOOD
UN HARVESTED
GROP
SECURITY
SERVITUDES
PRE EMPTION
ENCUMBRANCE
SUPERFICIES
OTHER PLANTS
•Un harvested grop
What happen while to summarize otherway?
Pairs of antipodes Pairs of antipodes
Natural landscape
Nature Rural
landscape Natrual palce
Cultural landscape
Artifact, Urban
landscape Simulated palce
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Owerall principles
Roose, A, Sepp, K, et. al. Neighborhood-defined approaches for integrating and designing landscape monitoring in Estonia
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Place and Camus – one more description We may refer here and hereafter to the
definition offered in the world-famous novel by Albert Camus, The Myth of Sisyphus where the place as a complexity of various implications is constituted from three basic components:
the physical settingsthe activities andthe meanings
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Place as a complexity
Sence of
Place
Activity
Meaning
Physical setting
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Data based approach of
Qualitative data Quantative data Land owners &
users Building owners &
users Forest owners &
users Developers Real estate
professionals Local authorities State agencies 3-d sector Society
Land register Web map service
Sales price register Forets register
GPS & GIS info Register of
Environment GPS & GIS info
Buildings register Premesies register
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APPRAISAL’s DATA
Multiplicity of Register of Environment
Biota Protected nature Monitoring Natural
recourses Water conditions Air conditions Permits &
licenses Waste & hazards
Nature protection objects
Valuable habitation
Areas with international significance
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Values of landscape due appraisal
Cultural value Historical value Ethics value Identity value Natural value Recreate value Tourism potential value Restful value
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Commonly nonmetric paramters
Some possible diversifications. Vol 1
Recreational value + Tourism potential value = Restful value
Existence of traditional approaches to category Commonly, in many occasions summarizing the
all earlier values of landscape Some basic drivers of restful value
Beauty Variety of relief and greenery Multiplicity of forest Existence of water bodies or accessible coastline Area is a carrier of local traditions and history Availability of popular sights and showplaces
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Ethics value Beauty of landscape Diversity of landscape Individuality of landscape Maintenance of landscape
Variety of landscape, i.e relation of fields, grassland, groves and buildings or structures
Traditionality of landscape Variety and spectacular relief Beautiful views, i.e attractive
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Some possible diversifications. Vol 2
Some possible diversifications. Vol 3
Identity value Similar to the sensitive value (e.g Persson)
Applied property valuation in Europe. A study of 19 countries. Master of science thesis No. 13, (1998)Stockholm: Kungl Tekniska Högskolan.
Important and valuable for local residents and neighbourhood
Commonly associated with former or future owner
In practice hard or commonly impossible to attachable to other properties
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Value of land - basic types of land use
Commonly metric parameters Value of land is in straight correlation
with the intended use of it, fixed in the Land cadastre as a specified cadastral unit use under the legislation and their determination (Land Cadastre Act).
Different schemes of diversifications; local v.s international
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Value of land - basic types of land use IVS regualtion
1. Land for housing2. Land for business 3. Land for manufacturing4. Land for bodies of water5. Land for transport6. Land for garbage disposal 7. Land for national defence8. Land for nature protection9. Land for profit yielding 10.Land without intended use11.Land for mining industry12.Land for peat handling13.Land for social use
Crop(ping) Farms Irrigated Land Perennial Plantings Specialised Livestock
Facilities Livestock
Ranches/Stations Dairy Farms Forestry/Timberland Specialised or Special
Purpose, Properties Integrated Unit Agricultural Activity Biological Assets
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Value of land - Land Valuation Act
Valuation - The object of a valuation is a plot of land without the buildings, forest, other vegetation or accessories situated thereon.
Appraisal - In an appraisal, the object of the appraisal may be a plot of land together with its essential parts and accessories.
Valuations of land are classified as assessments, appraisals and valuations of unlawfully expropriated land.
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Value of forest Commonly metric parameters Value of forest is not synonymous
with value of forest land. Forest land valuation is
subordinated to land valuation procedure. Common land valuation rules are employed
Forest valuation is a procedure of appraisal of standing wood. Standing wood value gain + marketability
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Value of forest Peggy Petrzelka, et.al in paper (Land use policy
2013), The elephant in the room: Absentee landowner issues in conservation and land management – absence of owners
It means – forest value approach is linked with ownership
The aim is value and the goal is evaluation of existing situation and extracting of standing wood value form the aspect of the Forest management plan
Site class of forestland is in correlation with standing wood classification and management plan
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Value of buildings Commonly metric parameters and
non metric parameters (sustainability, green aspect)
On possibility for diversification is: as it planned v.s as it built, all of these approaches are covering the full part of lifecycle, i.e from plans up till permit (license) of use (occupy).
The more demonstrative is built up the environment of buildings value according the different phase from idea up till the permit (license) of use (occupy).
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Value of buildings Idea master planning detail planning
terms of reference of design design permit to build building project construction works inspections permit to use use & utilization maintenance & reconstruction demolition reuse or waste
Here is key point of appraisers knowledge –to know current prices on to be able to compare them
Here is a key point of appraisers as an artist, we speak a ability to atract
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Similarities. Vol 1 Every item (type) of comparison is a subject
to organization or management plans like Landscape – Protection plans, maintenance plans Land - land adjustment and readjustment plans Building – building project, maintenance and
facility management plant Forest – Forest management plan
Every item is placed under degradation Every item as an asset needs a classification,
condition assessment and maintenance for derivation best value in the future
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Similarities. Vol 2
Subordinated to lifecycle, economical (50 years) and physical (up till 200-300 years) -
buildings Changeable in time Open to changes in surrounding
environment Sensitive to legal situation Permanent maintenace procedures
are required
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Differences. Vol 1 Methods applied for extracting Different usage of results – loan
security, economic objective Different ownerships – different
values approaches Power institutions influences –
ministries, departments Parameters describing the value are
varying Very different professional regulation
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Differences. Vol 2 Influence of the Structure of holding Chronological extent (amplitude) Extracted value - non economic Different types of extracted value –
special value, compensation value, investment value, synergetic value, fair value, market value, insurance value, ordinary value,
earlier applied - owners value i.e value in use
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About the situation The questionary is on the way. Based
on the involved parties of procedure Co-operation for deeper and
profounded layout with professor Sepp -landscape applicationassistant professor Lang – forest valuation Goal – paper for journal “Baltic forestry” or “Land use”
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BVC2011#Kaarel Sahk#Mutual recognation ... 26
Refererences 1. Encyclopedia of real estate terms : based on American and English practice,
with terms from the Commonwealth as well as the civil law, Scots, and French law / Damien Abbott London ; Washington, DC : Delta Alpha, c2000
2. Enemark, S. Educating Suveyors for Land Management, FIG; Com 2 sysmposium18-20.10.2000
3. Real estate valuation theory/ edited by Ko Wang and Marvin L. Wolverton Boston [etc.]: Kluwer Academic Publishers, 2002
4. The Valuation of Property A Treatise on the Appraisal of Property for Different Legal Purposes. Volume I. By James C. Bonbright. McGraw-Hill Book Company, Inc. New York and London, 1937
5. Real Estate Valuation. A Statement of the Appraisal problem and a Discussion of the Principles Involved in the Development of Valuation Methods by Frederick M. Babcock. University of Michigan, 1932
6. The Appraisal of Real Estate by Frederick M. Babcock. B.S. New York The MacMillan Company,1924
7. Tõnisson, J. Liikumatu varanduse hindamisest Liivimaal. Postimees, Jurjev, 1902
8. Väljaspool linnu ja aleveid asuvate kinnisvarade hindmaise seadus. Riigi Teataja nr 23, 1927.a
9. International Valuation Standards 2011. International Valuation Standards Council, London 2011
10. International Valuation Standards. Eight Edition. 2007. International Valuation Standards Committee, London 2007
11. A Valuer’s guide to the Red Book, RICS, 200722.07.2011
Author’s additional information:https://www.etis.ee/Portaal/isikuCV.aspx?LastNameFirstLetter=S&PersonVID=43875&lang=en&FromUrl0=isikud.aspx
E-mail [email protected]
Mail addressKreutzwaldi 5, 51014TartuEstonia 14-16.06.2012 27
ERES 2012# Kaarel Sahk # Real property appraisal - essential part based similarities and differences
Thank you!
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Questions please!
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