The importance of taking pictures during site inspections

picsIn every site inspection, an appraiser will surely draw cameras to take pictures of the property. As the saying goes, a picture is worth of a thousand words. This holds true in appraisal. Pictures play an important role in the whole process.

Some clients like banks require photos of the properties; but others will ask why there is a need in taking pictures. They are thinking of their privacy. Let’s discuss the importance of taking pictures in the appraisal.

First, it forms part of the appraisal process. In every appraisal report, you can notice pictures of the property in the annexes or addendum of the report. This helps the appraiser in telling the story of the house and will support the valuation and assumptions provided in the report. Photos can highlight condition, layout, and quality of a house, building or a tract of land. Since no one except the lender or the property owner will read the report, you are assured of the confidentiality and privacy of your properties.

Second, it serves as back-up to the appraisers’ memory. When an appraiser takes photos, the appraiser can remember what the house was like. For instance, there have been times when I labeled the floor as vinyl during my inspection, but the photos clearly showed the floor was ceramic tile. Or maybe in the sketch showed only four bedrooms, but there were actually five based on my photos. Everyone makes mistakes, and that includes appraisers.

Third, it’s documentation. The pictures will greatly help the appraiser if he will be called to testify in the court or any government proceedings.  Since most litigation requires an appraisal of value at the time of taking, photos can be a tremendous tool to assist the appraiser’s description of the property. Few weeks ago, a client asked me to value a property for litigation purposes, I took pictures of the property. Come court hearing, the judge asked the condition of the property, thus I shared in court the pictures I took during the site inspection.

Now you know why an appraiser takes pictures of the properties. Instead of worrying, help the appraiser take good shots by turning on lights and keeping away dogs.

Determinants of Land Values in Cebu City, Philippines

(Paper presented in  the International Conference on Business and Economy, held at Michael Richartz Center,  University of San Carlos, Cebu City last February 17-18, 2017}

This study discusses the determinants of residential land values in Cebu City. Within this scope, the aim of the study is to determine the variables that  have  significant relationship and contribution to the residential land values.  This study  is expected to contribute to further studies in city planning, urban design and real estate. For the government, land values are central to understanding property prices and assessments, and the economic impact of land-use policies and taxes levied on property. For private individuals and corporations, land value is one of the basic factors in the location decisions taken by residential and business firms.

Download it here.

Using Income Approach in Valuation

finanzmanagementThe income method is seldom used in appraisal. Most probably not used in banking institutions. But how are we sure that we are using the right method in valuing real estate properties? Properties that generate income such as apartment buildings, leasable buildings or even public owned enterprise properties subject for litigation should be appraised using the income approach. Lets dive deeper into this method.

This approach converts the income generated or projected income expected to be generated by a property into an estimate of value using one of two ways:  direct capitalization or discounted cash flows.   Both approaches use two important components:  (1) current or estimated cash flows and (2) a capitalization rate or discount rate.

Estimated cash flows should be realistic enough and comparable to the current and historical financial data of the property.  Additional considerations such as the economy or market trends can also impact estimates.  Future plans to expand or add additional assets to the property should also be considered if this will increase your cash flow generated from the property.

The capitalization rate or discount rate should be determined and derived from market data.  The capitalization rate is used to determine a sales price at a given point in time where factors of the market approach can be used.  The sales price could be a current sales price determined by capitalizing the current year’s net operating income.  Sales price could also be a future sales price determined by capitalizing the estimated net operating income of a future period.  The discount rate is the total rate of return a buyer would require to purchase an investment and is used to discount the estimated future cash flows to a present value because a peso received in the future is worth less than a peso today due to time value of money. The discount rate makes the present value of the property’s future cash flows equal.

An appraisal is extremely beneficial in providing information for valuing property.  Thus, Valuers should strive to level up their professional practice and use different methods to arrive at a justifiable and fair market value. That is, a market value that is fair to all concern.

They painted from heart



Finance 35 (Public Finance) Artwork on Philippine Social Protection Programs

In every journey there is a beginning and an end.  Thank you for giving me an opportunity to be part of your learning. It was a wonderful journey. Continue on your path towards academic goal and excellence, and always be of service to others. You’re going to do great things and the world needs all of your enthusiasm, hopefulness, irony, humor, and leadership.

Your paintings resembles your inner self, and our countrymen need you.  Hand in hand we can help the marginalized and our country.

Its Carolinian spirit… excellence with a heart.

International Conference on Business and Economy

The International Conference on Business and Economy held on February  7-8, 2017 attended by different academic institutions from Indonesia, Malaysia and Philippines.


Presenting my paper in parallel session “Determinants of Land Values in Cebu City, Philippines”. The talk highlighted on the ranking and significant contribution of determinants in land values using factor analysis and multiple regression approach.


Awarding of certificate of appreciation to the presenter by Session Chair Dr. Marrieta Israel of Far Eastern University, Manila and Louie Trapa, the rapporteur. The presenter include Dr. Khanser, Dr. Grace Lape, Engr. Carol Borres and Enp Agosto from University of San Carlos, Cebu City.

Tips in Litigation Appraisal

downloadI attended a court hearing recently, and when the presiding judge read the facts of the case and the lawyer’s motion to nominate an Appraisal Commissioner, his (Judge) immediate response is “What is the qualification of Mr. Appraiser ?”

An appraiser play an integral role in every part of today’s civil litigation. Litigation appraisal involves taxation, estate planning, expropriation, litigation support, property settlement and others. That is why when selecting a real estate appraiser, a lawyer always perform comprehensive conflict-of-interest checks  on background and qualification before hiring or accepting appraisers.

This conflict of interest check is vital in cases where a lawyer is dealing with large business that offers myriad services and types of clients. While in checking the qualification of an appraiser, a lawyer does it in a profound way through the following attributes such us technical acumen, experience in appraisal, educator and communicator and readiness to appear and have demeanor in court.

Experience in Appraisal – An appraiser should have broad experience in appraisal of different types of properties such us office, retail, warehouse, industrial, apartments, hotels, memorial. Have knowledge in different type of appraisal like fee simple, leasehold or lease fee interest, insurable, retrospective, raw land development method and prospective appraisal.

Technical acumen – associated with professional experience, organizational experience for broader real estate and economic counselling skills capability to solve complex problems requires a greater depth of skills sets. Technical skills are key to an accurate and comprehensive expert report, thoughtful review and critique of the opposing expert report, depositions, and testimony.

Educator and communicator – an appraiser should be ready to explain and discuss  the report in the commissioners meeting or in an open court. A lawyer should pursue in selecting an appraiser’s prior publications and writings. The reasons for examining the expert’s writing are two-fold. First, this type of examination can help a lawyer to further determine the appraiser’s qualifications. Second, how an appraiser presented their arguments and the manner of reasoning and  arrived at their opinion. Is their analysis persuasive? Does the report and opinion make a sense to a lay person?  Have they presented their report in an easy to read and logical manner?

Appearance and demeanor – Lawyer have confidence that the expert will come across as professional and knowledgeable.  At trial or deposition, the appraiser knows the importance of establishing and maintaining credibility, presenting an appropriate appearance and demeanor, remaining composed, considering posed questions carefully, providing a simple and direct answer, giving opinions based on facts, following the standards of generally accepted appraisal practice, being impartial and not advocating for the client, and always telling the truth.

The above characteristics are interrelated. The expert’s qualifications should  matched to the demands of the case as it relates to areas such as property type, experience, or technical requirements. The expert’s ability to articulate his or her position will allow him to better convey his or her skills and qualifications to fellow commissioners, judge, lawyers and other officers of the court. Any aspiring appraiser to be part of this challenging job should muster the above attributes and be of help in our justice system.

See you in court.

USJ-R Graduate Program featured Gus Agosto as speaker at Management Seminar

university_of_san_jose_-_recoletos_emblemUniversity of San Jose Recoletos  Graduate School of Business Management and Administration held its Management Seminar on December 9, 2016, at USJ-R Audio Visual Room, featuring guest speaker Gus Agosto, Real Estate Appraiser and Broker.

Sir Gus is a holder of degree in economics, and a candidate of masters in economics. His professional background includes managing AA RealtyPro Solutions, a real estate appraisal and consulting company he owns.  He was the former Managing Partner of Intech Property Appraisal, Inc., a Manila-based real estate valuation company. He is one of the practicing appraiser that was appointed several times, as Appraisal Commissioner, by different regional trial courts in Cebu.

Agosto’s speech was titled “The Determinants of Land Values.” He discusses the different factors that affect and influence the value of real estate properties. The seminar was designed to provide students learning and updates on latest development in the society.

In October 6, 2016, Appraiser Agosto was also the guest speaker at PAREB National Convention in Laoag, Ilocos Norte. He discusses “Top Concerns in Real Estate Appraisal”. Prior to that, he was also invited as Speaker in a seminar organized by the University of San Carlos Center for Lifelong Learning held at Cebu City Sports Club, last August 29, 2016.

He was elected as National Director of Philippine Association of Real Estate Board and has also served as the Founding President of Cebu South Real Estate Board,a local board of PAREB. Currently, he is a faculty in the University of San Carlos, Cebu City teaching real estate appraisal, real estate economics and finance, real estate consulting, ecology, planning and finance.

“Being an expert in his field, we find him fitting to be the best resource speaker to educate the students on Real Estate business.”, the Seminar Organizers told the participants and guests in introducing the speaker.


In the news

14502712_1258532074188302_6392999861770455162_nAppraiser Planner Gus Agosto was invited as a guest speaker in the recently held Philippine Association of Real Estate Board 56th National Convention and Election.  The convention was held in Laoag City, Ilocos Norte last October 6-8, 2016. He discusses the top concerns in real estate appraisal and appraisers  and how to navigate them.

Gus Agosto has been appointed Appraisal Commissioner by different regional trial courts in Cebu and former Managing Partner of Intech Property Appraisal, Inc. He is also a lecturer in University of San Carlos, Cebu City and the founding president of Cebu South Real Estate Board, an affiliate of PAREB.

“They appreciated much the discussion”,  the guest speaker said after the session.  Appraiser Gus  discussed top issues in real estate appraisal such as property identification, encroachment,  value adjustments,  highest and best use, legal documents and marketability.

The discussion was both enriching and interactive,  designed to help real estate practitioners in handling clients requirement for bank loans, buying and selling properties and properties subject to court litigations.

“There are many questions arises in the discussion. It shows of their enthusiasm to the topic. Appraisers should dare to show their crop in appraisal to appreciate and differentiate the profession.”  Appraiser Gus concluded.