REAL ESTATE APPRAISAL
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.
Definition of the techniques of evaluation:
There are three different techniques which allow us to estimate the market value of a property.
The cost technique in based on the substitution principle for which a buyer will not pay more for a property than the cost required to reproduce a similar property (including the acquisition of the location).
The property is considered as a physical entity compound(made up) of two elements which must be separately estimated: the location and the building (including the improvements in the ground. The technique of the cost consists in adding the cost of depreciated replacement of the building to the market value of the location (and improvements). The cost of depreciated replacement of the building corresponds to its cost of new replacement in which the depreciations and the disuses were deducted. The depreciation is a loss of value resulting from the physical deterioration of the building or from a disuse (functional) affecting it.
The technique of comparison aims essentially at estimating the most likely sale price of a building by the comparison and the analysis of real estate transactions implying properties similar to the building to be estimated. This technique bases on the substitution principle which wants that an informed buyer does not pay more for a building which he would pay for another building offering the same characteristics. This technique also bases on the fundamental principle in real estate evaluation, is the one of the offer and the demand.
The income technique consists in updating the net income normalized (standardized) by a building with income at the rate resulting from the market to indicate the market value. By basing itself on the principle of anticipation, it is a question of looking for the most likely price which would pay an investor, considering the net income and considering the return rate which he anticipates to receive from the invested capital.
I hope that this information will help you in your approach.
Robert-Charles Ferland ÉA DA
COURTIER IMMOBILIER AGRÉÉ ÉVALUATEUR AGRÉÉ