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DESKTOP VALUATION-ALL YOU NEED TO KNOW-COMPILED BY ER AVINASH KULKARNI

Saturday Brain Storming Thought (115) 29/05/2021

COMPILED BY ER AVINASH KULKARNI

DESKTOP VALUATION

A desktop valuation (also known as desktop appraisal) is a valuation performed without a physical inspection of a property

It will generally be undertaken where a full inspection of a property cannot take place

Accuracy of Desktop Valuation

It is considered unreliable and a full valuation will need to be ordered

A desktop valuation won’t take any renovations into account

Desktop Valuation fee

Approximately 15% to 35% of the full valuation fee

Nature of Desktop valuation

A desktop valuation is an automated valuation done using property data, recent comparable sales, and property listings

1) Automated

2) Instant

3) typically uses RP Data (Core Logic)

4) used by lenders for the low-risk loan

5) cheaper than a full version

Meaning of RP Data (Core Logic)

RP Data is a subscription-based product that gives you instant access to the 20 years worth of rich property data collected by Core Logic

Risk-free loan

It is a loan given against a risk-free asset

Risk-free asset

It is the asset that has a certain future return, and virtually no possibility of loss

Validity of desktop valuation

It is typically only valid for 90 days, a full version valuation is usually valid for up to 3-6 months

Time for desktop valuation

It is instant

Challange to desktop valuation

No, the lenders decide this, however, you can choose the lender

If a desktop valuation comes low, you can request the lender to do a full valuation

Reliable desktop valuation

1) the property in question has been sold in the last 10 years

2) the property is in reasonable conditions

3) the property has not been substantially changed since the last sale (built, sub-divided, renovated, etc)

4) the property is relatively standard (normal size, normal building)

5) there are many similar properties sold or listed in the local area

Details of Desktop Valuation

1) Instruction details

a) instructing party
b) customer name & details
c) reference number & date
d) purpose of the report

2) Property details

a) property type
b) local government area
c) title details
d) zoning
e) year of construction
f) additions if any
g) parking facility
h) general specifications ie wall, roof, flooring
i) last sale date
j) last sale price

3) Assessment details

a) assessed value
b) assessment completed date
c) customers estimate

4) Risk analysis

a) Market Risk score
b) Property risk score

5) Comparable sales details

Available sale instances data
a) sale date
b) sale price
c) comparability to subject property – comparable or not comparable
d) plan to show plot area, built-up area, road positions, and other important details
e) zoning
f) distance from the subject property
g) comments if any

6) Site photo

Subject property photographs from the inner and outer side

7) Aerial Map

Google location showing the subject property and adjacent properties

8) Cadastral map

late scale map showing the boundaries of subdivisions of land, usually with the directions and lengths thereof and the areas of

9) Street Map

It is the map that primarily displays roads and transport links rather than geographical information

10) Disclaimer and copyright

Core Logic and its licensors are the sole and exclusive owners of all rights, title, and interest (including IPR) subsisting in the EVR desktop report, including any data, analytics, statistics, valuation amounts, and other information contained in the publication

All rights reserved

Market Risk Score

Market risk is the risk of losses on financial investments caused by adverse price movements

The highest market score indicates an increased likelihood that there is an oversupply of properties for sale in the local area and download

Property Risk Score

Risk events such as fires, adverse weather conditions, and terrorist attacks all fall into the category of property risk

A higher score indicates an increased difficulty in accurately determining a property value due to its unique characteristics and a lack of comparable recent sales

Advantages of desktop valuation

1) this report will be completed a lot quicker than a normal valuation

2) it is affordable

3) it is easy to complete and online

4) quick, fast and painless valuation process

5) this valuation will take up to 48 hours to complete after proof of payment given

Disadvantages of desktop valuation

1) doesn’t take into account a properties actual condition (renovations, state of repairs, etc)

2) in certain areas there are few comparable properties and little historical data available

3) this report is unsuitable for replacement cost valuations as these require a physical inspection

4) desktop appraisal may not be able to ascertain the full extent of damage in case of poorly maintained properties

5) less accurate than the full valuation

Importance of desktop valuation

1) a desktop valuation review before leaving the office given the facilities now available is more important than ever

2) introduction of street view through google gives an opportunity to have a look at the area to remind yourself of what you can expect

3) more emphasis is placed on environmental considerations on a new site than an existing one because things have changed

4) as it is a new site it is very likely that subsidence risk will have been neutralized by design and requirements under building control, however, this could generate useful questions on site

Desktop Valuations – solution to travel restrictions due to coronavirus in a pandemic situation

Compiled by:-

Avinash Kulkarni

Chartered Engineer
Govt Regd Valuer
IBBI Regd Valuer

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