APPRAISAL METHODS
There are three different methods to estimate the market value of a property.
INCOME METHOD
The income approach is a real estate appraisal method that allows investors to estimate the value of a property considering the net operating income and a capitalization rate.
The income approach is typically used for all income-producing properties.
COMPARISON METHOD
The comparison method aims essentially at estimating the sale price of a building by the comparison and the analysis of real estate transactions involving properties similar to the property to be estimated. This method is also based of fundamental principle in real estate evaluation: the offer and the demand. This method is often used in real estate to determine the most probable selling price of a property.
COST METHOD
The cost approach is based on the substitution principle for which a buyer will not pay more for a property than the cost required to reproduce a similar one (including the acquisition of the land).
With this method, the property is considered as a physical entity made up of two elements which must be separately estimated:
the land and the building!
According to the cost approach, the value of a property represents the cost of the land added to the cost of construction, less depreciation.
Our expertise in real estate evaluation allows to determine and justify a building price exactly during the negotiations.
We also do reports of real estate property for legal, fiscal purposes or when it is a question of determining the market value of a property in a context of acquisition without intermediary.
Our appraisal reports are in accordance with the standards required by l'Ordre des Évaluateurs Agrées du Québec.
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I hope that this information will help you in your approach.
Robert-Charles Ferland ÉA DA
DIRECTEUR D'AGENCE . COURTIER IMMOBILIER AGRÉÉ . ÉVALUATEUR AGRÉÉ