Immovable Property Valuation
The valuation of real estate involves determining the value of real property (land & building). The location and the up-gradation or improvements of real estate have a direct bearing on its value. The banks and financial institutions require a valuation of the collateral securities, which are in the form of both – Immovable property, more commonly known as land & building assets, as well as plant & machinery.
Banks & financial institutions must ensure that the value of the offered collateral securities provides adequate coverage of the loans being disbursed to the borrowers. At the same time, the borrower would require that offered collateral securities are not undervalued to leverage their assets appropriately.
Either sale or purchase that requires a valuation of immovable property because each property has intrinsic attributes which are distinctive from others and need to be factored in for determining its value. It involves aspects of legal interests in the real estate, demand/supply, the suitability of location, site characteristics, etc. Real estate fulfils the needs of users or only as an investment for the owner.
However, in both cases, the potential for growth of value is the key driver for purchase. The location and the up-gradation or improvements of real estate have a direct bearing on its value.