appraisal process

appraisal process

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An appraisal process and technique conducted on the assets that comprises of property will be performed through Market Approach for land/all Properties and cost approach for building. The value is determined by comparing the latest sale and purchase transaction data or the offer price surrounded the asset location and calculating them as a base for appraisal. In conducting comparison process, there are some factors that required detail attention related to price: location, size, shape, usage, zoning, type of rights, and time of the transaction.

The sales comparison or market data approach in a real estate appraisal is based primarily on the principle of substitution. This approach assumes a prudent individual will pay no more for a property than it would cost to purchase a comparable substitute property. The approach recognizes that a typical buyer will compare asking prices and seek to purchase the property that meets his or her wants and needs for the lowest cost. In developing the sales comparison approach, the state licensed real estate appraiser attempts to interpret and measure the actions of parties involved in the marketplace, including buyers, sellers, and investors.

Method of Data Collection Data are collected on recent sales of properties similar to the subject being valued, called comparables. Sources of comparable data include real estate publications, public records, buyers, seller, real estate brokers and/or agents, appraisers, and others. Important details of each comparable sale are described in the appraisal report. Since comparable sales are not always identical to the subject property, adjustments are sometimes make for date of sale, location, style, bathrooms, square foot, site size, etc. The main idea is to simulate the price that would have been paid if each comparable sale were identical to the subject property. If the adjustment to the comparable is superior to the subject, a downward adjustment is necessary. Likewise, if the adjustment to the comparable is inferior to the subject, an upward adjustment is necessary. From the analysis of the group of adjusted sales prices of the comparable sales, the state licensed real estate appraiser selects an indicator of value that is representative of the subject property.

Statement of appraisers: To the best of our ability and belief as appraiser, we signed hereby certify that the statements contained in this report, upon which the analysis, opinions and conclusion expressed herein are based, are true and correct.

Furthermore, this report also sets forth all of the assumptions and limiting conditions affecting the analysis, opinions and conclusion contained in this report has been made in conformity with and subject to the requirements of the Indonesia Appraisal Standard (SPI) and Code of Ethics Indonesian Appraiser (KEPI).

We, the Company and Appraisers, have not present or contemplated future or any other interest in the property appraised. Definition: market value for the existing use was defined by IVS as: “The Market Value of an asset based on continuation of its existing use, assuming the asset could be sold in the open market for its existing use, and otherwise in keeping with the Market Value definition regardless of whether or not the existing use represents the highest and best use of the asset”. “Market Value” is the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion. Highest and Best Use (HBU), The most probable use of a property, which is physically possible, appropriately justi?ed, legally permissible, ?nancially feasible, and which results in the highest value of the property being valued.

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