One day, I was asked to observe in a meeting of real estate practitioners. They were finalizing the asking price of a property that has just listed. One of them opined that they can base it to the Bureau of Internal Revenue (BIR) Zonal Value, while the other one, succumbed to the pricing that is based on the prevailing prices of properties in the area. I almost bolted from my seat to immediately correct the practitioners.
I have appraised hundreds of properties already, and comparing prices of properties in the area is erroneous. It won’t give justice to the property of the client. Site valuation is not just as simple as comparing with other sold or offered for sale properties in the area. For one, no two vacant lots are the same typically; no two houses are the same. Every property is unique. There are differences in size, location, width and depth of lot, and leveling or topography of the land. The most important to consider is the lot size. Smaller lots tend to sell for a higher price per square meter than larger lots. However, if the end use is commercial, bigger lots command a much higher price. Once the sales price per square meter is determined for each comparable or “comps”, the reconciliation process begins. Then there are other factors that should be consider such as easement, road right of way, encroachment, presence of informal settlers or other occupants, the neighborhood, and also, the facilities and amenities in the vicinity.
In the larger scale, one has to consider also the real estate market, from the city or municipality up to the provincial level. All of these should be taken into account.
Meanwhile, the method of obtaining a market value from the Assessor’s Office is not reliable. We all knew that a lot owner usually declared their property at low level to minimize taxation. The zonal value also cannot be use nor relied on. Zonal values were based on streets or zones and not on individual property. Just remember that these two were all for taxation purpose only.
In conclusion, real estate practitioners should not shillyshally in topping the services of an appraiser. An experienced appraiser can guide practitioners in arriving at a reliable price of their listings. They have the knowledge and skills in discerning the value of a property. Your client deserve the best service from you.
Two university grads, Maria Khristine Abecia Lluisma and Ely Galland Ancajas Jumao-as, of the University of San Carlos placed 4th and 7th, respectively, in the April 2016 Real Estate Appraiser Licensure Examination. Lluisma garnered an 86.50 percentage rating while Jumao-as got an 85.00 percentage rating.
It is a big boost to the Bachelor of Science in Real Estate Management (BSREM) Program which is now being offered by the University and recently produced 10 graduates. The University has a 54.67% over-all passing performance vis-a-vis the 33.5% national passing rate.
“I would like to congratulate the 2 USC grad topnochers for performing exceptionally well in the last Real Estate Appraiser board exam, and welcome to the profession, ” said Appraiser Agosto, an Appraisal Commissioner and also a BSREM faculty member of the university.
The Professional Regulation Commission (PRC) announces that 1,271 out of 3,794 passed the Real Estate Appraiser Licensure Examination given by the Board of Real Estate Service in Manila, Baguio, Cagayan De Oro, Cebu, Davao, Iloilo, Legazpi, Lucena, Pagadian, Tacloban, Tuguegarao and Zamboanga last April 2016.
“The profession need highly competent and reliable valuer that will measure the true wealth of nation and uphold international valuation standards in the era of globalization”, Agosto ended.
List of successful examinees are as follows:
I appraised properties in Cavite recently. My client, which is an expat living in the US, instructed me to deliver the report within three (3) days for court submission. He gave me only the exact address of the property, the rest will be produced through research.
Early in the morning I travel to Noveleta, Cavite for my first assignment, through the Manila-Cavite Expressway or Cavitex. I arrived in the municipal hall and paid a courtesy call with the Municipal Assessor, then proceed to the site for actual site inspection and research.
Then I went to Trece Martirez City to conduct due diligence for a property under dispute. I visited the site and afterwards went to the City Hall to conduct research and investigation.
I finished the assignment in three days and submitted it. My clients were happy after reading the appraisal report I sent to them.”Thank you for excellent job.”
A commendation that makes an appraiser happy.
Let us now tour Cavite.
Cavite is a province in the Philippines located on the southern shores of Manila Bay in the Calabarzon region on Luzon island. It is bounded on the north by Manila Bay and Metro Manila, on the east by Laguna, on the west by the South China Sea, and on the south by Batangas. It is composed of 7 Cities and 26 Municipalities. With a population of 3,090,691 in 2010, it is the most populated province in the country.
You can reach Cavite from Metro Manila through Aguinaldo Highway and Manila-Cavite Expressway or Cavitex .Situated just 21 kilometers south of the capital, it is one of the most industrialized and fastest growing province because of its close proximity to Metro Manila. Many companies, such as Intel, have established manufacturing plants in numerous industrial parks in the province. As of 2012, there are 382 actively operating companies in Cavite Export Processing Zone.
Major historic events happened in Cavite that shaped Philippines today, if you want to know more about Philippine History, you can visit Cavite and it will be like seeing the history itself not just reading them from Philippine History books.
In our practice of real estate appraisal and brokerage, it is basic to have knowledge on site location and lot plotting. I am sharing this presentation to real estate practitioners and the general public in general.
We should continue in educating ourselves to better serve the public and raise our professional practice to a new and higher level.
Valuation is a core function that underpins real property transactions. Many businesses see valuation as an unwanted and unnecessary expense. This is not always the case and if used effectively they can prove to add an arsenal of information and achieve business successes.
I was requested to appraise a hospital property -a special purpose property. A special-use property is defined as a building with special construction materials, unique physical design or arrangement that limits its utility to the use for which it was built. They are typically single-purpose buildings which are adaptable to only one particular process, use or even one particular company.
The purpose of my valuation is to render an opinion of market value of the property. I’m quite bit excited to do the job yet anxious of its complexity. It is not just a hospital, it is an institution built for quite a long time; its name was synonymous to a place of medical care in the region.
The improvements suitability of use and capacity has been affected by advances in technology, resulting in some older hospital facilities becoming obsolete. But in analyzing the property, it is important to take it as a whole. The property in its entirety has many potential uses. Its strength lies in its location, since it is situated along the main road of the heart of the city.
Special use properties are truly unique, they require detailed knowledge of their exclusive characteristics, and the additional skill required in their valuation process become a specialty service area.
After a month, I just read in the news that the hospital owner has just inked a joint venture agreement with a big mall company for a construction of a commercial and hospital facilities.
Truly, appraisal can be an arsenal towards business transaction success. With this assignment, I learned that appraisal of special purpose properties makes our profession more interesting. Appraisers should never stop learning.
Real estate valuation is the process of developing an opinion of value. It can be used in determining the value of property whether single use or mixed use development.
So far we have discussed more on the single use appraisal, now let me share and discuss the appraisal of mixed use development.
In valuing property, the first and foremost we should have to know is the intended use or the purpose of the appraisal. It will serve as a guide in appraising the mixed use property.
Mixed-use development is—in a broad sense—any single building, that blends a combination of residential, commercial, institutional, or industrial uses, where those functions are physically and functionally integrated. It may also a site or a building, complex of buildings, or district of a town or city that is developed for mixed-use by a private developer, government agency, or a combination.
In a nutshell, there are benefits in mixed use developments. For example, it reduces distances between housing and workplace, retail business and other. It is now common to have developments which align to the concept of live, work and play.
It is a great challenge to an appraiser in coming out of an opinion of value that reflects the actual use and the highest and best use of the mixed use property. An appraiser can use the different approaches in valuation such as sales comparison, cost and income approach. And since it is a mixed use, you have to use different comparable, and methods. An appraiser has to dig more data and information from the knowledgeable persons in the neighborhood, government officials and industry leaders where the property is located.
In analyzing data, we have to consider the zoning, allowable use, predominant use, conforming use, legal and illegal non-conforming use, the highest and best use, neighborhood analysis, market trends not only of the city but the region as well.
Nothing beats the importance of conducting actual inspection of the property and the neighborhood. It will give concrete data and visualization of the property. The trend of development in the locality and region, will broaden your perspective and analysis.
Valuing mixed use properties will force the appraiser to be more analytical and creative in solving problem –to determine the market value that is reliable and defensible.
We welcome 2016, not just a new year, but a new era for our country and other members of ASEAN. ASEAN is one community tonight.
The ASEAN Economic Community endeavors to become a single market and production base. It will unify the 625 Million people of 10 countries under ASEAN as a single community. ASEAN will be connected thru effective air, sea and land links. Further development of regional connectivity will help people, goods and services flow across the region more quickly and cheaply.
ASEAN identifies professions that are allowed to practice in other ASEAN countries. Small-Medium Enterprises (SME) will become more competitive. Those who are open to ASEAN market can expand operations and acquire office space and industrial properties outside the Philippines.
ASEAN community gives us more opportunities. The free movement of goods, services, skilled labor and capital would require more commercial and residential buildings and other infrastructures.
At the same time, it brings challenges to connect. Bigger, skilled and more advanced real estate practitioners from other ASEAN countries can enter the local market. They need local partners and counterparts.
New era requires new mindset and system. It means old habits and comfort zones should be archived. It is an era where connectivity and excellence is a must.
Happy New Year! Welcome to ASEAN Community.
The WordPress.com stats helper monkeys prepared a 2015 annual report for this blog.
Here’s an excerpt:
A San Francisco cable car holds 60 people. This blog was viewed about 3,100 times in 2015. If it were a cable car, it would take about 52 trips to carry that many people.