by: Sophary
Phnom Penh: Property Valuation is a process of determining the market value of a particular property. It provides information and the market value of properties, including the detailed features, build-cost, cost-benefit analysis, location, zoning, highest and best use, and the real estate market trends. The property valuation helps make the right decision in property investment, development, mortgage processes, lease and sale.
Property Valuation supports various purposes and uses, including buying and selling, joint venture, development, performance, loan security, transfer of shares, lease review, due diligence, accounting, auditing, and insurance.
However, the lack of property trading and the limited assessment of property transactions on the market makes it challenging for real estate investors, owners and buyers to understand the value of their properties, primarily due to the change periodically of the market value and rent on the market.
For Real Estate Buyers, Property Valuation helps property buyers to know the actual value of the property, allowing them to make the right deal, guiding for better decision making, and preventing them from paying high-price schemes.
To the bank offering home Loan, the bank can decide on the loan amount with different mortgage terms and conditions after knowing the value of the collateral property.
Moreover, Property Valuation helps Real Estate sellers understand the current market price for the building and prevent low-balled buyers. Having the property valuation report in hand will ensure sellers from pushing for lower than the prevailing market prices and causing a loss. It also gives sellers the right advice in selling or holding back on properties.
For Insurance Company and Clients, Property Valuation provides an understanding of the insurance value to see if it is sufficient for future damages due to any hazard or accident. The accurate Property Valuation ensures that the coverage cost is reasonable without the risk of having or providing low or high insurance coverage.
For Lessors and Lessees, Property owners create a continuous income-generating stream from renting the property. The Property Valuation provides the market rent and the property’s rental potential, helping lessors and lessees to negotiate a better rental deal. It also provides the rent trend on the market and the expected amount that buyers and sellers can anticipate for their investment.
For Accounting & Financial Reporting, Property Valuation determines the asset’s value for financial reporting. Therefore, it is necessary to generate accurate and reliable financial statements of the company’s assets.
