In this post we briefly look at the valuation methodologies used for assets other than real estate.

Collateral Valuation approaches for other assets i. Farm Product and Inventory

Such collateral is valued on a market price basis. In determining the value the appraiser will consider or undertake the following: 

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The Cost Approach is another valuation methodology for real estate. The post provides a step by step process of how the Cost approach works and presents situations where it should or should not be used. It also covers the type of data and data sources used for carrying out the analysis.

Cost Approach a. Methodology

The value of the property is equal to the Cost of the Land + the Current cost…

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The Income Capitalization Approach is another valuation methodology for real estate. The post provides a step by step process of how the income capitalization approach works and presents situations where it should or should not be used. It also covers the type of data and data sources used for carrying out the analysis.

Income Capitalization Approach a. Methodology

The income capitalization approach follows the steps below: 

Step 1: Estimate the annual gross income

One…

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Sales Comparison Approach

The Sales comparison approach is an estimation methodology for valuing real estate. The post details how the sales comparison approach works and presents situations where it should or should not be used.

a. Methodology

The sales comparison approach provides a good estimate of the value of the property when the property to be valued is similar to properties which have been recently sold within the same city, town or…

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We discuss the two-step process of real estate valuations in this post. We also briefly review the criteria that appraisers use for selecting the most appropriate valuation approach.

There are two basic steps in the valuation of real estate: 

The first step involves estimating a price/ rent/ cost per square meter/ feet (or other acceptable unit of measure) of the property. This may be carried out using either one or more…

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