Real estate appraisal a review of valuation methods

• Published in: Journal of property investment & finance Vol. 21; no. 4; pp. 383 - 401
• Main Authors: Pagourtzi, Elli, Assimakopoulos, Vassilis, Hatzichristos, Thomas, French, Nick
• Format: Journal Article
• Language: English
• Published: Bradford MCB UP Ltd 01.08.2003; Emerald Group Publishing Limited
• Subjects: Appraisals; Assets valuation; Estimation; Forecasting; Forecasting techniques; Fuzzy logic; Market surveys; Mathematical models; Profits; Real estate; Real estate appraisal; Spatial analysis; Studies; Tax assessments; Valuation; Valuation methods; United Kingdom > UK
• ISSN: 1463-578X; 1470-2002
• DOI: 10.1108/14635780310483656

The valuation of real estate is a central tenet for all businesses. Land and property are factors of production and, as with any other asset, the value of the land flows from the use to which it is put, and that in turn is dependent upon the demand and supply for the product that is produced. Valuation, in its simplest form, is the determination of the amount for which the property will transact on a particular date. However, there is a wide range of purposes for which valuations are required. These range from valuations for purchase and sale, transfer, tax assessment, expropriation, inheritance or estate settlement, investment and financing. The objective of the paper is to provide a brief overview of the methods used in real estate valuation. Valuation methods can be grouped as traditional and advanced. The traditional methods are regression models, comparable, cost, income, profit and contractors method. The advanced methods are ANNs, hedonic pricing method, spatial analysis methods, fuzzy logic and ARIMA models.