Valuation of property (Sample)

 

Valuation Certificate

On the request of Mr. of Suratlal sah the property belongs to Mr. Sharvan sahvisit of the property site in ward no 3,Netachauk, Rajbiraj  Minicipality, Saptary, on Aug 10, 2012, in order to assess the value of the property and as report incorporating all the observations and on our detailed assessment of the property vis-à-vis the surrounding locality and the prevailing developmental trends.

The property that has been valuated is located in ward No. 3 Rajbiraj  Minicipality, Saptary

A valuation report of this property has been prepared on the basis of an examination of the relevant land ownership papers, available cadastral map, and physical verification of the site, detailed discussion with relevant person and on prevailing norms as well as procedures that I have evolved through my various experiences.

It is my considered opinion that the valuation of the aforementioned property Rs. 4178490/-(Rupees forty lakhs seventy eight thousand four hundred ninety only). I also hereby, declare that I have no direct interest in the property that has been valuated.

 

 

 

Aug 10, 2012

 

 

 

 

Valuation of property

in the Name of

Mr. Sharvan sah

(I) Introduction

a)  Property inspection:-

                On the request of Suratlal sah the property belonging to Sharvan sah located in ward no. 3, Netachauk Rajbiraj  Minicipality, Saptary was inspected for valuation on 10 Aug 2012 by Architect as property valuator. The property that was inspected consists of a good house on a plot of 0-10-2-2.4 i.e. 3645 square feet( 1 kattha).

The inspection visit revealed the following details:-

(i)  Owner of property:- Sharvan sah

 (iii) Plot number of property:- 225, ward no. 3

(iv) Land Area:- 0-10-2-2.4 i.e. 3645 sq. feet, ( 1 kattha).

(v)  Building Description:- Residential , two and half storied.

(vi) Approach road details:- 14’ bituminous  road

b)  Property description:-

The property that was inspected and has been valued comprises of rectangular shaped, flattish property on which is a two ans half storied residential building.

(i)  Type of property: - Private property.

(ii)       Land details:-

Shape: - Rectangular shaped

Topography: - Flattish

Frontage: - 44’

Depth of land: - 83’

(iii)     Services:-

Water Supply: Yes

Electricity: - single phase connection from NEA

Sewerage: - Yes

Telephone: Yes

(iv)      Immediate Environment:-

The immediate environment is School area in north direction, Residential area in east and south direction, also market area in west.

c)   Property valuation:-

  The property under discussion has been valuated on the basis of the following:-

       i.          Detailed study of the ownership documents and available cadastral map.

     ii.          Detailed examination of the available drawings of the buildings.

   iii.          Physical verification of the site by site visit and detailed measurements of the land and buildings.

   iv.          Discussions with people knowledgeable about property values.

     v.          Local market survey to determine ongoing commercial rates and,

   vi.          Comparison with valuations of similar properties.

 

(II) Qualifying and Limiting conditions:-

 

(a)   The total area of the property is 0-10-2-2.4 i.e. 338.6 sq.m. ( 1 kattha). according to the land ownership paper.

(b)   As it has already been mentioned, the location of the property is in bordering main road, is the main reason for the high price of the land under discussion.

(c)   Since the frontage of the land under discussion is bigger as compared to that of land, the price of the land will be high as lands with such frontage.

(d)   Since the access road is 14 feet  road, the value of the property on this road is enhanced, because of good width of road.

(e)   The land value has been determined using the weighted average method, in which the governmental  value has been given 10% weight age, commercial valuation has determined by our spot valuations and market survey is given 30% weightage and the distressed value based on our earlier studies and our fast experience has been 60% weightage.

(f)    The value of the building has been determined on the basis of prevailing unit costs which are based on current market values.

(g)   The property under discussion is the Private property.

(h)   It must be borne in the mind that inspite of all the methods and calculations used to determine the land value, it can only be indicative of the prevailing price. The final scale figure of the buyer and seller during the final scale negotiations. For example, if a seller is desperate to sell, he is most likely to sell at a price lower than that he would have obtained if he had waited for proper moment. Similarly, if a buyer is desperate to buy or if he likes a particular property, he would most likely pay more than he would have if he bided his time

 

(III)Value calculation:

Valuation of land:

The valuation of any land is very depended on a number of important factors such as the location, environment, size and shape of the property as well as the supply and demand economics prevailing during the time of valuation.

In terms of location, the property is located in Residential area.

The immediate environment as has been mentioned is cool environment

As regards the size of the property, it is fairly big even compared to Municipality standards.

As regards topography and shape the land under discussion is flattish and rectangular shaped.

Apart from the above mentioned considerations, the property under discussion must, above all, be valuated within the context of supply and demand economic prevailing in the country.

However, the price of the land ultimately depends on the psychologies of the buyer and seller.

It must also be borne in mind that in the last few months, the prices of the lands have tended to remain fairly static. The inflationary trend in land prices seems to have levelled off.

While all the above mentioned factors have a bearing on the value of land, the actual value in which a particular land is ultimately brought or sold depends upon the psychologies of the buyer and the seller.

The final scale figure is very depended on who is more desperate the buyer or the seller. Generally speaking, the scale figure tends to be arbitrarily on the high side. The scale figures can be referred to as “commercial values”.

With reference to the property under discussion, the value of the land has been determined By using the weighted average method where 10% weightage has been given to the value fixed by the government, 30% weightage to the commercial value of the land fixed on the basis of market survey, our spot valuations and comparable valuations and 60% weightage has been given to the “distressed value” as determined by our past experiences. In the case of highly desirable areas, the distressed value tends to be quite close to the commercial value. The different values that have been considered in this valuation exercise are as follows:

(i)    Government value= Rs. 75,000 per kattha

(ii)  Commercial value= Rs. 2,00,00,000 per kattha

(iii)          Distressed value=    Rs. 1,90,00,000  per kattha

 

By the weighted average method, the price of the land has been taken to be

 Rs.(0.1*0.75+0.3*2+0.6*1.9) corer  

 = Rs. Core  per kattha

Table 1

Value of land

Description	Area of land	Recommend land rate/kattha(Rs.)	Value of land(Rs.)
Plot No. 225 Ward No. 3  NetachaukRajbiraj Municipality,Saptary Flattish , rectangular Shaped land	1 kattha	Rs. 20000000	Rs.11,46,600/-

 

 

b) Valuation of Buildings:

As it has already been mentioned a two and half storied residential house.

The floor plans and site plan are given in appendix. The detailed description of the building is as follows:

(a) Walls: Walls are made of local bricks in cement mortar and internal wall surface plastered with cement mortar. The plastered surface has been painted.

(b)   Floor: Ground floor is solid floor type and neat cement finished and floor is RCC floor slab.

(c)   Ceiling: The ceiling have been plastered and painted.

(d)   Staircase: RCC staircase is provide

(e)  Doors and Windows: The doors and windows frame are of mangowood. The window shutters have also mangowood frame. The openable window shutters have glazed shutters which open separated. The windows have grills, External doors have panelled shutters.

(f)  Roof: The roof is RCC.

(g)   Sanitary: Yes , Standard Bathroom with shower is provided

(h)   Electrical: wiring is coceal wiring. The electrical fixtures are of ordinary type. Jhoomer light is used in living room for decoration

 

(IV)Synopsis of the building

 

 Thus the value of the property belonging to Mr. Ramchandra Gakurel can be synopsised as follows:

(i)    Value of land= Rs.11,46,600 /-

(ii)  Value of building= Rs. 30,31,890 /-

 

Total cost=Rs. 4178490/-

 

(In words: forty lakhs seventy eight thousand four hundred ninety)

 

 

 

 

 

 

 

 

APPENDIX I

INTRODUCTORY DETAILS

OF

Property of Mr. Ram Chandra Gajurel

 

1	Location	Ward no 2,Goldhunga VDC
2	Plot number
3	Area of plots	2.352 aana
4	Owner of property: (a)   Owner’s name (b)   Father’s name (c)   Grand father’s name	Ramchandra Gajurel
5	Age of owner	52
6	Current address of the owner	Nuwakot
7	Details of surrounding properties (a)   North East (b)   South West	Nagarjun Forest Residential Building Residential Building Public Property Bare land
8	Details of access road (a)   Type of road (b)   Width of road	Muddy raod 10’
9	Distance of property from nearest commercial built up area:	About 2000 m towards East to New Bus Park Balaju
10	Site details (a)   Shape (b)   Topography (c)   Width of frontage (d)   Depth	Rectangular Plain 35’ 23’
11	Site services (a)   Water supply (b)   Electricity (c)   Sewerage system (d)   Telephone line	½ “ connected water supply Yes Yes Yes
12	Site constraints(such as overhead high tension line, noise pollution, proximity of river, etc	No
13	Classification of locality High/middle/poor/mixed class	Mixed
14	Proximity to civic amenities like school, offices, hospital, commercial areas etc:	Within 1 km
15	Agreement of easement:	No
16	Is the property situated in residential, commercial, industrial mixed	Residential area
17	What is the floor area ratio per ,meter and percentage actually utilized	1:0.645
18	Name of the tenant	Ram Chandra Gajurel
19	Monthly rent	No
20	Give details of water electricity telephone charges	No
21	Has the tenant to bear the whole or part of the cost of repairs and maintenance?	Yes
22	What is the amount of property tax? Who is it to bear it?	No
23	Is the building insured	No

 

 

APPENDIX II

TECHNICAL DETAILS

of
Property of  Mr. ram Chandra gajurel

A)             General description

1	Year of completion	2069 B.S
2	Anticipated future life	60 yrs
3	Type of structure	Framed
4	Current usage of structure	Residential
5	Type of design(Post Moder/Modern)	Modern
6	Special architectural structures	Double height living room
7	Current state of building	maintained
8	Number of floors	2.5
9	Plinth area of the building	520 Sq. ft
10	Total floor area of building	1538.5Sq. ft
11	Percentage coverage of site building	64.5%
12	Other comments (if any)	No

 

B)              Structural elements:

1	Type of foundation	Isolated footing foundation
2	D.P.C (type and thickness)	40mm
3	Walls a)               External b)               Internal c)               partition d)               Finishing	9’’ B/W (1:4) in cement mortar 4’’ B/W (1:4) in cement mortar 4’’ B/W (1:4) in cement mortar (1:3) cement plaster & painted with water proof cement paint
4	Floors a)               Ground floor b)               First & Second Floor c)               Finishing	Solid floor (cement plaster)        Solid RCC Floor         Inside plaster with no plaster on outer walls
5	Roofs: a)               Type b)               Finishing	RCC roofing Tile
6	Doors a)               Frame b)               Shutters c)               Fittings d)               Finishing	Sal wood Paneled saal wood and flush type Ordinary painting
7	Windows and ventilators a)               Frame b)               Shutter c)               Wire mesh shutter d)               Grills e)               Fittings f)                Finishing	Sal wood Glazed Yes MS grills in first floor Medium class painting
8	Staircase	RCC with wooden handrail
9	Other comments (if any)	No

 

C)             Electrical installation detail:

A	Type of wiring	Conceal
B	Type of fittings	Ordinary
C	Number of points
D	Other comments	No

 

D)             Sanitary installations details:

1	Quality of fixtures	Ordinary
2	Details of fixtures a.                No. of water closets (commode) b.               No/ of basins c.                No. of urinals d.               No. of bath tubs e.                No. of kitchen sinks f.                No. of geysers	3 3 no no 2 no
3	Floor finish	Cement plaster
4	Wall finish	1:3 cement plaster
5	Water supply	Intermittent supply
6	Hot water system	no
7	Underground tank (capacity and type)	Yes 7000 ltrs
8	Overhead tank (Location, capacity and type of construction)	Roof top 1000ltrs galvanized sheet tank
9	Other comment if any	No

 

E)              Other features:

1	Sewage disposal system	Septic tank
2	Road and pavements	Yes
3	Compound wall	yes
4	Other landscape features	No
5	Other comments if any	Near to Nagarjun forest

 

 

 

APPENDIX III

BUILDING PLAN AND LOCATION PLAN

 

 

 

 

 

APPENDIX IV

LAND VALUE CALCULATION

1)     Instances of sale of land in the locality if available date of sale price and area of land sold: No

2)     Comparison of the concerned land with the sold land as stated above: better/similar/inferior/not applicable

3)     Minimum registration rate as fixed by government: NRs. 75,000 per Ana

4)     Current market rate recommended by real estate company/ broker : NRs.6,00,000  per Ana

5)     Distressed value=    Rs. 5,00,000  per Ana

 

6)     Weighted average calculation:

 

Rs.(0.1*0.75+0.3*6+0.6*5) lakhs

Rs. 4.875 lakhs per Ana

 

Land value

Land rate adopted in the valuation	Nrs. 4,87,500 per Ana
Net area considered for valuation	2.352 Ana
Goss value of the land	Nrs.  11,46,600

 

 

 

 

Appendix V

Determination of Depreciation

Of Building

 

1.            Year of Commencement of Construction: 2068 BS

2.         Year of Completion: 2069 BS

3.         Method of Construction: Framed Structure

4.         Life of Similar Structures: 60 years

5.         Anticipated Future Life of Structure: 60 Years

6.         Scrap Value: 10%

7.         Method of Depreciation

            (i) Straight Line Method                              Annual Depreciation

D_a= C-S/n                                                        Rs. 30,78,060*1.5%

            = 100-10/60                                                    =Rs.46,170

            = 1.5%/ Year

            (ii) Constant Percentage Method                    Annual Depreciation

(iii)          Sinking Fund Method                                     Annual Sinking Fund

(iv)                       Depreciation method of valuation                 

D= P(1-rd/100)ⁿ

 

RECOMMENDED DEPRECIATION= Rs.46170 per annum

 

 

APPENDIX VI

LAND OWNERSHIP CERTIFICATE

 

APPENDIX VII

CITIZENSHIP CERTIFICATE

 

APPENDIX VIII

AREA CALCULATION OF LAND

The land being rectangular in shape, the area of land was simply calculated by formula:

Formula for calculation of land area

Area of rectangle = L × B

Where,

         L = length

           B= breadth

Total area of land = 805 Sq. ft

 

AREA CALCULATION FOR BUILDING

 

Ground floor	520.5 Sq. ft
First Floor	547.78 Sq ft
Second Flor	470.75 Sq ft
Total Area	1539.03 Sq ft

 

 

 

APPENDIX IX

 

CADASTRAL MAP OF THE SITE