Real estate valuation: disputes related to the market value of real estate. The concept of market value

In economic relations, the concept of “market value” often appears. This is the monetary expression of the obligation of one participant in a transaction to another, the magnitude of which is dictated by the conditions of an open and competitive market. When planning the sale of products, fixed assets or business as a whole, organizations, entrepreneurs and individuals should focus on this indicator. This can be obtained from an independent assessment or marketing analysis. A price reduction of more than 20% entails questions from regulatory authorities and possible tax liability.

The determination of market value does not depend on the specific characteristics of the transaction and does not mean that the purchase and sale of a product or service will actually take place. This is a kind of collective perception of participants in economic transactions, formed under the influence of the peculiarities of the market situation, but not reflecting the impact of non-market factors.

In general terms, market price is monetary value the cost of the product, which is formed when the following conditions are met:

• The market is open, i.e. there are no economic or administrative barriers that would make it impossible for new sellers and buyers to enter.
• The market is recognized as competitive, i.e. homogeneous goods and services are sold on it, there is a sufficient number of buyers and sellers who are free to make decisions.
• Purchase and sale takes place in an open and competitive market, where the buyer has sufficient information about the properties of the product being sold and can choose between it and alternatives. To complete a transaction, some effort is required from the company: negotiations and development of a marketing plan.
• The buyer and seller are guided by standard economic motivations. They are not interconnected and do not experience pressure from non-market circumstances. The client has sufficient time and opportunity to research information about available product alternatives. His goal is to find the most attractive price, and in achieving it he will not agree to an inflated price that is inadequate for the market situation.
• The estimated cost of a product or service reflects the actual situation, and not the past or market participants' expectations for the future. Therefore, companies engaged in independent assessment of property or business always indicate in their reports the date the information provided is current.

The concept of market value is a calculated, hypothetical category, because in a real economy markets do not meet the characteristics of absolute competition and openness. That is why calculating such a price does not guarantee that the transaction will definitely take place.

Understanding Market Value in Tax Law

The Tax Code of the Russian Federation widely covers the concept of market value. The analysis of this term given in the document allows us to track and suppress the actions of economic entities that, by reducing prices, minimize fiscal contributions to the treasury.

If a person or organization sells a product at a cost 20% below the market price, regulatory authorities may be interested in it. If a violation is proven, the seller will have to pay additional taxes to the budget, and along with them penalties and fines.

From the point of view of fiscal services, a reasonable market value is one that corresponds to the price of similar goods and services offered by other sellers in similar economic conditions. According to Art. 40 of the Tax Code of the Russian Federation, the concept of homogeneity includes the following assessment parameters:

• identical commercial purpose of the products;
• similar level of quality;
• one country of origin;
• similarity of trademarks;
• similar reputation of sellers.

Tax legislation is based on the “presumption of market value”. Its essence is that the prices of transactions concluded between non-interdependent commercial structures are a priori recognized as market prices.

The cost of goods sold between related parties is considered market value if the principles of free pricing are observed. For example, goods are sold through exchange trading or at a price tag agreed with the antimonopoly committee.

A market price is considered when it corresponds to the cost of homogeneous products, information about which can be obtained from official sources: on the portals of government authorities, in reviews of specialized organizations, from reputable printed publications, etc.

When analyzing price tags set by a company or individual entrepreneur, tax authorities take into account information about similar transactions, i.e. those that are similar:

• payment method (prepayment or postpayment);
• delivery time of goods;
• volume of sold batches.

If the specified parameters differ significantly, the transactions are considered incomparable and cannot be used for valuation.

Tax legislation introduces the principle of objectivity, according to which, in order to determine the conformity or non-compliance of the market value, the regulatory authority must analyze the data of not one transaction, but several.

How to determine the market price?

Market price can be expressed in monetary terms. It reflects how much a particular product or service can be sold for if it is put up for auction in a competitive environment right now. There are three recognized methods for determining the indicator:

1. Comparative

This is the simplest technique, the essence of which is to search for data on similar objects. Authorities’ data are considered as sources of information state power, specialized organizations, printed publications, etc.

The specialist collects an array of data, identifies those that relate to goods similar to the ones being studied, determines trends and makes adjustments to the peculiarities of the market and terms of transactions. If necessary, correction factors decreasing or increasing are used.

1. Expensive

It is based on the assumption that the buyer could not purchase the product, but make it with his own hands. The appraiser's task is to determine what costs he would incur. The technique is suitable for determining the value of real estate, new products that have no analogues on the market.

For example, a company plans to sell a house. It is calculated how much it will cost to erect such a building, what is the price of purchasing or long-term lease of land, connecting communications, etc. The result is adjusted for correction factors related to wear and other factors.

1. Profitable

It is based on the assumption that the owner of the property could use it for other purposes and earn income. For example, when determining the market value of an apartment, the amount of rental payments for a specified number of years is determined. This method is least applicable in Russia due to the opacity of the domestic market.

In what cases is the price considered market price?

Economists and tax authorities proceed from the postulate that market value is a reflection of the collision of supply and demand for homogeneous goods. This is the maximum price at which a seller can sell its products in a competitive environment and the minimum at which a buyer can purchase it.

In practice, tax authorities misinterpret the concept of market value, presenting unfounded claims to organizations and individuals. Let's look at common mistakes.

1. The cost at which the company sells goods to other contractors is not recognized as market value

To determine whether the price tag is too low, tax authorities do not have the right to use information about other transactions of the company being studied. They must use one of three recognized methods: cost, income capitalization or comparative, based on the analysis of information from public sources.

1. Current market value is not the average price of goods

This approach does not take into account the circumstances of a particular transaction and therefore cannot be considered objective. The cost of goods can vary significantly depending on the high cost of raw materials, delivery methods, logistics features, the availability of deferred payment and other factors.

1. Tax authorities should take completed transactions as a basis for comparison.

Analysis of the approximate cost of goods cannot serve as a basis for the conclusion that the company uses illegal pricing. Any information used by the Federal Tax Service should relate not to hypothetically possible, but to actually completed transactions over a short period of time.

1. The maximum price of goods is not recognized as market price

Practice shows that fiscal authorities often try to hold companies and citizens accountable and charge them additional taxes, taking as a basis the maximum price of transactions of a particular type. For example, they take as a basis for comparison the most expensive apartment sold, the highest rent. This approach is unacceptable, and the actions of tax officials can be challenged in court.

1. Market price is not identical to cost and customs value

The price tag for a product, by definition, must be higher than the total costs of its production, otherwise the company will incur losses. As for the customs value, it is determined using a fundamentally different methodology than the market value. Its only purpose is to indicate in the documents necessary for declaring goods imported from abroad.

1. Market value is not equal to book value

It is important to understand that book value and market value are not identical concepts. The first reflects the price at which an item of fixed assets is included in the accounting records of the enterprise. The second characterizes how much money you can sell it for if the need arises.

1. In price analysis, you can use comparisons only with similar products sold under similar conditions

If a company sells Audi cars, transactions of other market participants selling Gazelle or Lexus cannot be used as a basis for comparison and analysis. Products have different countries of origin, consumer characteristics, manufacturer reputations and other parameters, so they cannot be considered homogeneous.

The terms of transactions are often of decisive importance in establishing their monetary characteristics. The pricing policy of a large company selling food products in large quantities cannot be compared with the approach of a small family business selling candy self made piece by piece.

The influence of market price on the activities of the manufacturer is a proven fact. In order to make a full profit and not have problems with the tax authorities, the company must set this indicator based on an assessment of costs or the current economic situation. The right approach to pricing - the basis of successful business activities.

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Often during litigation involving real estate, disputes arise over the value of that real estate. Regardless of whether this dispute concerns the division of jointly acquired property, insurance payments, recovery for damage caused, privatization of real estate or foreclosure on an unpaid loan, in any case, the court decision will be made based on the value of the relevant property. Accordingly, the correct assessment of the value of real estate is the most important stage of legal proceedings, directly affecting the interests of each of the parties to the case. At the same time, conducting a property assessment is a right of citizens and organizations, and not an obligation.

IN Federal law dated July 29, 1998 N 135-F3 (as amended on March 8, 2015) “About appraisal activities V Russian Federation"(hereinafter referred to as the Law on Valuation Activities) valuation activities mean professional activity subjects of valuation activities, aimed at establishing market, cadastral or other value in relation to objects of assessment. In other words, appraisal activity is an assessment of the value of real estate by a qualified specialist (appraiser).

The appraiser must be a member of self-regulatory organizations of appraisers (for example Russian society appraisers, Interregional Association of Appraisers, National College of Appraisers, etc.) and, in accordance with the requirements of the law, insure their liability that may arise in the event of damage to the insured as a result of violation of the requirements of federal appraisal standards, standards and rules of appraisal activities established a self-regulatory organization of appraisers, of which the appraiser was a member at the time of the damage.

In appraisal practice, the value of real estate is divided into the following types: market value, cadastral value, investment value, liquidation value, inventory value, and replacement cost.

The most common and important for humans is market valuation real estate value. This value is used in most transactions, such as: purchase and sale, transfer of an object as collateral, when determining rental payments, during privatization, etc.

We will talk about disputes related to the market value of real estate in this article.

Based on the Law on Valuation Activities, the market value of real estate is the most probable price at which this real estate can be alienated on the open market in a competitive environment under normal social, economic and political situations in the country.

When concluding transactions, the parties must remember that according to the law, if a specific type of assessment of the value of real estate is not defined in a regulatory legal act or in an agreement, it is the market value of this object that must be determined. In addition, terms such as “true value”, “reasonable value”, “equivalent value”, “real value” also mean market value.

The question of applying the market value of real estate arises, for example, in cases of claims related to insurance contracts, since it is real estate that is most often the subject of this contract.

Thus, by virtue of paragraph 2 of Article 947 of the Civil Code of the Russian Federation, when insuring property, unless otherwise provided by the insurance contract, the insured amount should not exceed its actual value (insurance value). At the same time, Article 951 of the Civil Code of the Russian Federation directly provides that if the insured amount specified in the insurance contract exceeds the insured value, the contract is void in that part of the insured amount that exceeds the insured value. Thus, based on the provisions of the Civil Code of the Russian Federation and the Law on Valuation Activities, when insuring real estate, the insured amount should not exceed the actual value, which is equivalent to the market value of this real estate. This approach to the application of market value is used uniformly by the courts (for example, Resolution of the Federal Antimonopoly Service of the Moscow District dated January 21, 2013 in case No. A40-113591/10-59-1009, Appeal ruling of the Vologda Regional Court dated September 12, 2012 No. 33-3798/2012, etc. .d.), and not only in insurance matters.

Disputes over the application of market value are also common in mortgage default cases.

For example, case of the St. Petersburg City Court No. 2-2393/12 on foreclosure of mortgaged property. In this case, the defendant failed to fulfill his obligation to pay interest under a loan agreement secured by a mortgage. As a result, during the trial, foreclosure was applied to the mortgaged share in three-room apartment by selling the specified share at public auction. At the same time, according to the Law “On Mortgage”, the court is obliged to determine the initial sale price of the property that is being foreclosed on. Accordingly, the court determined the initial sale price of the apartment shares to be equal to the market value of the apartment shares determined in the appraiser's report submitted by the defendant.

However, most often in judicial practice Disputes arise about the reliability of the market value indicated in the appraiser's report.

The law provides that if there is a dispute about the reliability of the market value indicated in the appraiser's report, this value can be challenged in court. Moreover, in cases where a real estate appraisal is mandatory, the court has the right to oblige the parties to enter into a transaction at a price determined during the consideration of the dispute in court by involving an independent appraiser in the case as a forensic expert and asking him a question about the value of the market value of the property.

It should be taken into account that challenging the reliability of the value of the value of the object of assessment, determined by an independent appraiser, by filing an independent claim is only possible if the law or other regulatory act provides for mandatory assessment for the parties to the transaction, a government agency, official, controls legal entity.

The legislation lists a number of cases in which assessment of the market value of real estate is mandatory, namely:

— when determining the value of objects owned by the Russian Federation, constituent entities of the Russian Federation or municipalities, for the purpose of their privatization, transfer to trust management or lease;

- at mortgage lending individuals and legal entities in cases of disputes regarding the value of the subject of mortgage;

- when drawing up marriage contracts and dividing the property of divorcing spouses at the request of one of the parties or both parties in the event of a dispute about the value of this property;

— when monitoring the payment of taxes, if disputes arise regarding the calculation of the taxable base.

If it is impossible to independently challenge the value of the valuation object determined by an independent appraiser by filing a separate claim, the issue of the reliability of this value may be considered as part of the consideration of a specific dispute regarding a transaction, an issued act or decision taken(including cases of declaring a transaction invalid, challenging a normative act or decision of an official, invalidating a decision of a governing body of a legal entity, etc.).

Let us consider, as an example, case No. A40-110270/2014 of the Moscow Arbitration Court on the claim of GLOBAL-CAPITAL LLC to invalidate a notice of change in unilaterally Department of City Property of the City of Moscow rent under the agreement. By a court decision dated November 17, 2014, the claim was rejected. The plaintiff appealed this decision, among other things, on the basis of the unreliability of the independent appraiser's report. Meanwhile, the appellate court, taking into account what is established in Art. 65 of the Arbitration Procedure Code of the Russian Federation, the burden of proof, in a resolution dated February 26, 2015, came to the conclusion that the defendant did not prove the unreliability of the appraiser’s report on the market value of the rent provided by the plaintiff, since: the conclusions set out in the said report are well-reasoned; the court had no reason to doubt the competence of the person who compiled the report; after the defendant received the plaintiff’s letter about changing the rental rate and before the plaintiff filed this claim in court, the defendant did not raise any objections on the grounds of unreliability of information about the value of the market value of the rent set out in the relevant report; after the plaintiff filed a lawsuit with the court, the defendant did not provide evidence of the unreliability of the report presented by the plaintiff. Since the reliability of the conclusion about the value of the market value of the appraised object determined in the report was not refuted by the conclusion about the value of the market value of the appraised object by another report provided by the defendant, the court had no grounds for ordering a forensic examination in the case. Consequently, the lease agreement was extended, and rents established at the market value indicated in the report submitted by the plaintiff.

This example shows that, when declaring the unreliability of an independent appraiser’s report during a trial, the party who made this statement must prove the unreliability of this report, at least by providing another report on the assessment of market value. In this case, the court has the opportunity to choose a reliable report and take into account the market value of the property determined in the reliable report, or, if there are two different reports, the court can order forensic examination and determine the market value of the property during the trial.

The described position of the courts is confirmed by the Resolution of the Arbitration Court of the North-Western District dated 03/02/2015 in case No. A44-5396/2013 on the settlement of disagreements regarding the determination of the sale price of real estate that arose during the conclusion of a purchase and sale agreement for a building with a land plot, purchased in the manner of implementing the preemptive rights to purchase leased real estate. In this case, the court, taking into account the presence of two different reports, ordered a forensic examination in order to establish the market price of real estate. As a result, the market value of the disputed real estate was determined by the court based on the conclusion of the forensic examination.

Thus, in practice it happens that in any dispute one party evaluates real estate in one company, and the second party turns to another appraiser. As a result, the plaintiff and defendant provide two different appraisal reports to the court. In addition to the fact that they are prepared by different specialists, the result of the assessment can often differ significantly. Although appraisers are required to use certain techniques and evaluate according to established standards, which should lead to the same results, in fact the value is not always the same.

In cases where the results of the assessment of the same object, calculated by different specialists, differ significantly from each other, the court orders an examination in the form of another independent assessment. In addition, such an examination is ordered by the court to verify the reliability and authenticity of the appraiser’s report. In this case, the appraiser who carried out the assessment is involved in the case as a third party who does not make independent claims regarding the subject of the dispute (Article 51 of the Arbitration Procedure Code of the Russian Federation).

It also follows from the above examples that there are two types of documents that independent appraisers prepare for the court: an appraisal report and a forensic expert’s opinion.

According to the information letter of the Presidium of the Supreme Arbitration Court of the Russian Federation dated May 30, 2005 N 92 “On consideration arbitration courts cases of challenging the valuation of property made by an independent appraiser" and by virtue of Article 12 of the Law on Valuation Activities, the report of an independent appraiser is recognized as a document containing information of evidentiary value, and the final value of the market value of the appraisal object indicated in such a report is reliable and recommended for the purposes of transactions with the subject of valuation.

According to legal requirements, the property assessment report must not be ambiguous or misleading. The report must provide all information necessary for a full and unambiguous interpretation of the assessment results reflected in this report.

The conclusion of a forensic expert, as well as the assessment report, has evidentiary value and is also drawn up in accordance with the requirements of current regulations. At the same time, the preparation and execution of a forensic expert’s report is carried out not only taking into account the requirements of legislation in the field of assessment, but also in compliance with the law regulating the provisions on forensic examination.

Another group of disputes that are relevant today are cases regarding the determination of the cadastral value of real estate equal to its market value. The relevance is explained by the fact that since January 2015, changes have been made to the tax legislation, according to which the property tax of individuals will be calculated based on the cadastral value, despite the fact that the market value may be significantly lower than the cadastral value. Therefore, assessing the market value of real estate is also important for establishing its cadastral value.

Thus, the Judicial Collegium for Administrative Cases of the Supreme Court of the Russian Federation considered in open court a civil case challenging the cadastral value of real estate. The plaintiff applied to the Kemerovo Regional Court with an application to establish the cadastral value of the relevant real estate objects in an amount equal to their market value. In support of her stated requirements, she pointed out that the cadastral value of the properties she rented significantly exceeded their market value, which was confirmed by a report assessing the market value of the property. At the same time, the plaintiff indicated that the lease agreement gives the tenant the right to establish in court cadastral value leased premises in an amount equal to their market value.

In Determination No. 81-APG14-14 of February 11, 2015, the Supreme Court found that the current legislation does not contain restrictions preventing the tenant of a real estate property, as a person with an independent legal interest, from applying to the court in accordance with the procedure established by law in order to establish the cadastral value of such property. object in an amount equal to its market value, if such a right is secured in the lease agreement.

However, it should be noted that from the provisions of Article 24.18 of the Law on Valuation Activities it follows that in the event of a challenge to the results of determining the cadastral value, the market value of the property must be established as of the date as of which its cadastral value was established. That is, if the market value of the corresponding property is not determined on the date of determination of the cadastral value, it will be impossible to establish the cadastral value equal to the market value. This position is reinforced by the above-mentioned ruling of the Supreme Court.

To summarize all of the above, it is worth noting that when making various transactions in relation to real estate, if a certain type of value should be applied to such a transaction, the relevant agreement must precisely indicate the type of real estate valuation to be applied. Then in the future there will be no dispute about what type of real estate value to apply in this case. If there is no indication of the type of real estate value to be used under the contract, the market value will be used.

When assessing the value of real estate, turning to independent appraisers, you need to seriously approach the choice of an independent appraiser, since the report drawn up by him will be one of the most important documents used when carrying out actions with real estate, and should not raise doubts about the reliability and correctness . In case of receiving an assessment report with actual deficiencies, as well as violations of legislation and state standards, during the trial, the court may order an examination and receive a new assessment report, according to which the market value of the disputed property may be different. Moreover, the newly determined value of real estate may turn out to be significantly lower than the value determined previously.

When concluding real estate transactions, as well as protecting your rights to real estate in the event of a dispute, you must understand that an assessment of the market value must be carried out at the appropriate time. Thus, when making transactions - before concluding a corresponding agreement, if a dispute arises - before filing a corresponding statement of claim, as well as in cases of conducting administrative procedures in relation to real estate - before accepting government agency legal act in relation to this real estate.

Income approach

The income approach to determining the value of real estate is based on calculating the amount of expected future income from its use. Their assessment is necessary when analyzing investment projects and calculating the shares of the municipality, private individuals investing in capital construction or reconstruction, as well as when buying and selling an operating enterprise. It should be taken into account that in market conditions, money, in addition to fulfilling the role of a means of payment, is itself a commodity and circulates on the market. Price monetary resources depends not only on the size of their supply, but also on the conditions of their provision and return. Therefore, the buyer of a property, aimed at making a profit from its use, must compare his expenses for purchasing real estate and the planned income. If purchased for 1,000,000 rub. the object can generate a profit of 100,000 rubles over the next 10 years. per year, after which it will completely lose its value, then after 10 years the buyer will only be able to return his funds. At the same time, having invested them in the bank, he would receive interest on the deposit for the same 10 years.

Investments in real estate inevitably involve risk due to many factors, ranging from: different countries, and within the country. The risk depends on the stability of the socio-political and economic situation, the likelihood of changes in legislation, natural disasters, criminality of the economy, etc. Obviously, the greater the risk an investor is willing to expose his funds to, the more income he plans to receive from their investment.

The acquisition of real estate for consumption purposes, for example, the purchase of an apartment for personal residence, differs from the investment motive. In this case, we are not talking about extracting income, but about obtaining other personal benefits. Investing in real estate is not always a one-time investment. Often this process is extended over time and uneven. Important from the point of view financial analysis, is the duration of the income stream over time. Investments spent at the initial stage do not bring profit, while funds placed in the bank bring income in the form of interest on the deposit.

Consequently, future income must compensate not only for the investment spent, but also for the losses caused by the fact that these investments do not perform for some time. Compounding interest in which the amount from which interest is calculated (the base) does not change is called simple compounding. Simple accrual is called decursive if interest is accrued at the end of the billing period. Another type of simple interest accrual is the case when interest is accrued at the beginning of the billing period, and the final amount of debt repayment is taken as the accrual base. This method is called antiseptic.

The income approach allows for a direct assessment of the value of a firm depending on expected future earnings. It provides:

• - Drawing up a forecast of expected future income;
• - Assessing the risk associated with generating income;
• - Determining the time of receipt of income.

Reduced to the current moment Value, that is, the present value of future earnings, serves as a guide to how much a potential investor is willing to pay for the company being valued.

The basic concept in income approach are net cash receipts or net cash flows, defined as the difference between inflows and outflows Money for a certain period of time. When calculating this indicator, the following calculation procedure is used:

Net profit + Accrued depreciation + Increase in long-term debt - Increase in equity working capital Capital investment - Capital investment - Reduction of long-term debt = Cash inflow.

When determining future cash flows, the expected future life of the firm should be divided into two periods. For the first period, usually called the forecast period, a detailed annual forecast of cash receipts is compiled. At the end of the forecast period, the company must reach an equilibrium state in which the growth rate of cash receipts as a whole will remain stable and predictable (post-forecast or residual period).

Reduction of future cash receipts to current value is carried out using a discount rate. Because of the uncertainty or risk associated with future earnings, the discount rate should be greater than the risk-free rate of return, that is, it should provide a premium for the risk of investing in the firm being valued. In other words, the discount rate should reflect the rate of return investors require, taking into account the perceived risk.

Over the forecast period, each annual cash flow is discounted separately. As for the second period, the so-called final value of the income stream at its beginning is initially determined. Then, the latter is reduced to the current value on the valuation date.

Most often, the discount rate is calculated using the so-called capital asset valuation model (CAPM), which provides the following methodology for determining the discount rate:

Risk-free rate of return security+ Median of peers * Market equity risk premium + Company size premium + Company specific risk premium + Insurance risk = Discount rate

For example:

The rate of return on a risk-free security is 3.8%

Market premium for equity investment risk - 7.5%

The median value for comparable companies, calculated on the basis of stock exchange data, is 0.76.

If the company is classified as small, then the risk of investing in small company - 5,3 %.

The risk of investing in a specific company is 4.5%.

Insurance risk - 7%.

The discount rate for the Capital Asset Valuation Method was:

3,8 % + 0,76 * 7,5 % + 5,3 % + 4,5 % + 7 % = 26,3%.

There is another method for determining the discount rate - the cumulative construction method.

Market (comparative) approach

The market approach to real estate valuation is based on the analysis of information on the prices of purchase and sale transactions of objects similar to the one being valued or similar to it in any parameters, which includes four successive stages:

• - collection of information;
• - analysis of its reliability and applicability;
• - conclusion on the value of the object being assessed;
• - assessment of the accuracy of the result obtained.

Gathering the necessary background information is a separate and sometimes difficult task for the appraiser. For some segments of the real estate market, such information is open and publicly available, for others access to it may be limited, for others there may be no such information at all or its volume is very insignificant.

If the appraiser has a sufficient amount of information, he needs to check its accuracy. In fact, often the parties, for various reasons, hide the true price of the transaction, trying to underestimate it or, in some cases, overestimate it. Therefore, the information used must meet the following basic criteria:

• - the parties to the transaction had a sufficient understanding of the given market;
• - the parties to the transaction are not related to each other by any other relationships that affect the price of the transaction;
• - data on the transaction price were obtained from a person who is not interested in its distortion.

When applying the market approach, not only information about transactions of purchase and sale of real estate is acceptable, but also about other related transactions - transactions of collateral, insurance, deposits in authorized capital and others. For example, when concluding a transaction to pledge a real estate item, the parties do not exclude the possibility that this item may be sold on the market to fulfill the borrower’s obligation. The amount of the loan secured by the collateral of the property has a direct connection with its value, since it amounts to 60-70% of its value. Based on this, without having direct information about the value of an item in a purchase and sale transaction, the appraiser can predict it based on information about other transactions. The main criterion for selecting information used to evaluate a real estate property using the market method is the comparability of the value of the property being valued with the objects traded on the market. However, meeting this criterion is a necessary but not sufficient condition. Only if the main criterion is met, a comparable property can be considered for compliance with other criteria: location, time of sale, condition.

When the main criterion is met, additional criteria are desirable, but not required. Differences in additional criteria (as well as other differences) can often be compensated for by making appropriate adjustments. If it is possible to select data on the sale of completely identical objects, then by averaging these data, one can with sufficient confidence draw a conclusion about the value of the object. In reality, it is almost impossible to select statistics on transactions with similar objects, so it is necessary to adjust the market data on sales, reflecting the differences between the objects being compared and the one being valued. Adjustments to the value of comparable properties are expressed both in absolute monetary values ​​and as a percentage of value. The main way to determine the quantitative values ​​of adjustments is to analyze paired sales - sales of two objects that are similar in all respects, except for one. From the analysis of such sales, the appraiser can obtain a quantitative adjustment value corresponding to this parameter.

Thus, using the market approach, it is necessary to determine the parameters by which the valued object differs from comparable objects and calculate the adjustments to the value of comparable objects corresponding to these differences.

When assessing some species typical objects it is possible to use integral adjustments that include all the numerous differences from a comparable object. In this case, it is necessary to substantiate and calculate the integral value of the difference between the valued object and the comparable one. In addition to the objective characteristics of the property - location, quality, age, conditions of sale, it is necessary to take into account that comparable properties were sold some time ago. Over the past period of time, the market situation could have changed and entailed a corresponding change in prices, which should also be taken into account when calculating adjustments.

It is also necessary to take into account inflation dynamics, changes in legislation, infrastructure development and other factors that influence changes in value over time. For this purpose, in addition to purely analysis economic factors it is necessary to take into account the long-term development of the relevant territory, enshrined in the General Plan, in detailed planning and development projects, and other regulations, reflecting the policy of government authorities on the development of the relevant territory. It should also be taken into account that over time the price change could be so significant that the time factor cannot be taken into account through adjustments and therefore the available information cannot be used.

Cost-effective approach

The cost approach (the cost approach to valuation) is based on the assumption that the costs of constructing a property, together with the costs of acquiring the site and preparing it for construction, are an acceptable guide for determining the value of real estate. However, it should be taken into account that the costs of creating a property are not equivalent to its market value. Therefore, the scope of application of the cost approach is quite narrow and is used when:

• - real estate valuation in markets characterized by a lack of sufficient information to apply the market or income approach;
• - assessment of specialized buildings (schools, hospitals, train stations, engineering infrastructure, etc.), which, as a rule, are not capable of generating income, and there is no information on their sales;
• - when insuring real estate, when the insured amount, insurance premium, insurance compensation are determined based on the costs of the policyholder;
• - when calculating taxes and fees established by law;
• - when revaluing fixed assets and in some other cases.

Property valuation using the cost method is carried out in stages:

• 1. Calculation of the market value of the right to the land plot on which the property is located.
• 2. Calculation of the cost of construction (restoration or replacement) of a real estate property.
• 3. Determining the degree of reduction in the usefulness of a property as a result of wear and tear:
  • a) physical (the result of the aging of the object, the impact of natural and climatic factors, the nature of the operation of the object);
  • b) functional (the result of a discrepancy between the architectural, constructive, design solution modern market standards (market demand);
  • c) economic (external) (result negative influence external environment(environment) of the object).
• 4. Calculation of the residual value of improvements to an object by subtracting the costs of its restoration (replacement) from the cost, i.e. all types of wear. In the case when replacement cost is used in calculations, functional wear and tear is not taken into account, since replacement cost includes modern requirements and market standards.

Determining the market value of real estate by summing the residual value of improvements and the market value of the land. There are five main methods for assessing the market value of real estate:

• 1. The capitalization method assumes that the value of real estate is equal to the amount of money that, using an alternative method, the owner of the property would receive a similar return on the invested capital.
• 2. The method of market comparisons consists in determining the market value of a land plot by considering the psi of sales of comparable plots as the market value of the assessed plot. Market value reflects the results of the interaction between sellers and buyers operating in the open market, provided that both parties are fully informed and have the desire and ability to complete the transaction.
• 3. Development (development) method - used to evaluate vacant land plots, to a lesser extent - to evaluate real estate objects consisting of land plots and their improvements. This method is applicable if the value of the property being assessed, consisting of improvements and land, is entirely contained in the land.
• 4. The residual method for a land plot is an important method from a practical point of view and is similar to the method of capitalization of land rent. When using it, the market value of land is calculated based on the assumption that the property is used in the most efficient way, which is an indispensable condition for assessing the market value.

The cost approach is based on the analysis and restructuring of the company's balance sheet. This approach involves summing up the net worth of a firm's assets and then subtracting its liabilities from this amount.

The result shows the estimated cost equity. However, the book value of assets, based on the presented balance sheet, does not reflect their market value. Accordingly, it must be amended by making a preliminary assessment of the reasonable market value of each asset separately and determining how much the carrying amount of liabilities corresponds to their market value.

In order to rebuild the balance sheet, the company is analyzed and fixed assets and current assets are assessed. Equipment experts and estimators are invited to evaluate buildings, equipment and structures. As for current assets(inventories, accounts receivable, finished products etc.), then their analysis is carried out on the basis of the company’s documents and consultations with its specialists.

The assessment of buildings (structures) is carried out both at the cost of reproduction and at the cost of replacement.

The full cost of reproduction means the cost of construction at current prices exact copy of the assessed object using the same materials, standards, design and with the same quality of work, which embody all defects and functional wear.

Total replacement cost is the cost of constructing, at current prices, a property of equivalent utility to the property being assessed, but using new materials in accordance with current standards, design and layout.

Determining the cost of construction includes an assessment of direct and indirect costs, as well as business income. Estimated construction costs should cover the preparation of working documentation and drawings, allotment of a land plot, development and approval of technical specifications for engineering support, preparation of a construction passport and technical report (survey), engineering and geological survey of the site and networks, development, approval and approval of a feasibility study , finally, the actual construction of a new company. Entrepreneurial income is the amount that the investor plans to receive in excess of the costs of implementing the project, taking into account the risk of profitability of comparable objects.

Since in most cases an object constructed earlier than the valuation date is valued, total depreciation is deducted from the construction cost.

The assessment of installed machinery and equipment is carried out based on the results of sales of similar used equipment on the secondary market. In this case, not only the degree of physical wear and tear of the object being sold is taken into account, but also functional and technological obsolescence.

In addition to the main technological equipment Transmission devices also need to be assessed vehicles, computing and measuring instruments, i.e. those types of machines that, although they themselves are not directly involved in the production process, however, serve it. Equipment to be installed is not revalued and is included in assets at book value.

Intangible assets are also subject to assessment: trademark rights, copyrights, management know-how, acquired licenses, marketing research and so on.

Long-term financial investments, including assets of other firms, banks and companies, are valued whenever possible at market prices. If this is not possible - at nominal cost.

Short-term debt is not adjusted, since payments on it are required in the near future. Also, settlements with creditors, social insurance, settlements with the budget and extra-budgetary funds are not subject to adjustment.

After making appropriate adjustments to the company's balance sheet as of the valuation date and deducting liabilities from total net assets, the value of the enterprise is determined using the cost approach.

Benchmarking approach.

Benchmarking is a method of evaluating closely held companies that uses information about stock transactions of comparable public companies.

This method, based on a comparative approach, determines the value of a company based on comparison with similar companies whose shares are freely traded on financial markets or companies that have already been purchased or sold recently (transaction analysis method).

An appropriate sample of a peer company is selected based on the comparability criterion. Ideal peer companies are those that operate in the same industry as the company being valued, conduct similar business operations, have a comparable product range, and are similar in size. Typically, at least 6 to 8 peer companies are required to compile an adequate sample.

For each company that serves as an image of a peer company, several cost indicators or price multipliers (coefficients) are calculated, such as the ratio of “company price to revenue”, “company price to cash flow”, “company price to net asset value”. After these indicators are calculated for each peer company, based on risk analysis and financial characteristics a suitable multiplier (ratio) is selected and applied to the relevant financial information of the company being assessed.

As a result of applying multipliers to financial indicators of the company being valued, a preliminary assessment of the real market value of the company appears. Depending on the valuation environment, this estimate may be adjusted based on other factors such as a controlling interest discount, line risk factor or poor competitiveness.

To determine the reasonable market value of a company, as a rule, all three valuation approaches are used. In accordance with each approach, preliminary values ​​of the firm's value are obtained.

To determine the final value, firms are valued on a case-by-case basis.

Firm estimates resulting from use different approaches, will differ in magnitude from each other. In most cases, appraisers determine the value of an enterprise in the form of an interval assessment, that is, in the range from minimum to maximum estimates obtained using various approaches.

The documented result of a company's valuation is the valuation report. The report must indicate the date of the assessment of the object, the assessment approaches used, the goals and objectives of the assessment of the object, and also provide other information that is necessary for a complete and unambiguous interpretation of the results of the assessment objects reflected in the report.

Reconciliation of results

The final stage of the assessment is the agreement of the results obtained various methods within the framework of the approaches used. The purpose of such approval is to obtain the final total cost.

The three valuation approaches are independent of each other, although each is based on the same economic principles. In an ideal (open and competitive) market, all three approaches should result in the same amount of value. However, most markets are imperfect; supply and demand are not in equilibrium. Potential users may be misinformed and manufacturers may be ineffective. For these and other reasons, approaches may produce different value indicators, which the appraiser compares with each other during the approval procedure.

As stated in the Federal Valuation Standards (FSO No. 1), the reconciliation method chosen by the appraiser, as well as all judgments, assumptions and information used by the appraiser when reconciling the results must be justified.

The most preferable option for carrying out the procedure for coordinating the results obtained in order to obtain the final value of the cost is considered to be weighted averaging. The appraiser weighs the extent to which this or that approach corresponds to the purpose of assessing the object in question, whether the calculations carried out are supported by market data, whether they do not contradict them, and in the final conclusion to a greater extent relies on the cost indicator that is obtained on the basis of the most ideal approach from all points of view.

In other words, to agree on a weighing procedure, the appraiser must justify the choice of weights used.

For determining specific gravity For each result of each approach, it is necessary to conduct a quantitative and qualitative analysis, taking into account the following factors:

• - The purpose of the assessment and the intended use of its results.
• - Determined type of cost.
• - Type of property rights.
• - Quantity and quality of data used in calculations.
• - Level of control of the ownership share in question.
• - The level of liquidity of the property being assessed.

The appraiser determines the relative importance, applicability and validity of each value indicator based on criteria such as adequacy, quality of information, accuracy of estimate and quantity of evidence.

Comparative coefficient - the most accurate when evaluating an apartment, is 80% of 100%

Cost coefficient - average with reliability of apartment assessment, is 50% of 100%

The income ratio is less reliable because this approach is practically not used, it accounts for 30% of 100%

Apartment price=(Income approach + Comparative + Cost approach)/3

Like any product on the market, real estate objects have a price and value (see Fig. 5.1).

Rice. 5.1. Cost, price and costs

Property price - this is the price of a specific purchase and sale transaction that took place. Since the price in any actual proposed transaction is related to the value of the property, quite often these terms are used interchangeably.

The transaction price may differ significantly from the market value. This difference depends on a number of reasons, such as the availability of analogues or market stability. So, during the crisis of 1993-1994 and 1998-1999. in Ukraine, for the sake of quick receipt money, sellers willingly agreed to a 10-20% price reduction in order to speed up the sale of objects. Often the initial price is deliberately inflated by 15-20%, in order to then lose that amount during the bargaining process. Sometimes, the price is formed under the influence of the personal ideas of the participants in the transaction and cannot be predicted.

Price is the monetary equivalent of property.

Market value of the property is the most likely price at which it could be sold on the open market under competitive conditions. It is assumed that:

o one of the parties to the transaction is not obliged to sell the property, and the other party is not obliged to buy it;

o the parties are well aware of the subject of the transaction and act in their own interests;

o the object of assessment is presented on open market in the form of a public offer;

o the transaction price is a reasonable remuneration for the object of evaluation and an incentive for someone else to complete the transaction;

o payment for a property expressed in monetary form. Thus, the market value is subject to negotiation and can either increase or decrease.

The concept of the value of a property can be viewed from different perspectives. Thus, they distinguish between market value, replacement cost, consumer, restoration, investment, insurance, taxation value, liquidation, initial, residual, collateral value of the right to lease a property, the value of an operating enterprise and a property in existing use, etc.

Consumer cost (value in existing use) reflects the value of a property to a specific owner who does not intend to put it on the market.

Replacement cost determined by the costs in current prices for the construction of an exact copy of the property being assessed. The same architectural solutions are used here, similar building construction and materials, even the quality of construction and installation work, also reproduce the obsolescence and shortcomings of architectural solutions of the reproduced object.

Replacement cost is determined by the cost, at current prices, of constructing a property whose utility is equivalent to that of the property being assessed, but constructed in a new architectural style using modern design standards and advanced materials and designs, as well as modern equipment.

Replacement cost is expressed by the costs of reproducing an exact copy of an object, and the replacement cost is expressed by the costs of creating a functional analogue.

Investment cost - the price of a property, determined based on its profitability for a specific person to achieve a given investment goal. Investment value is calculated based on the investor's expected income and the specific rate of their capitalization, and can be either more or less than its market value. This type of cost is subjective.

Cost of insurance of real estate objects is calculated on the basis of the replacement cost or replacement cost of an object that is under threat of destruction (or destruction). Based on the cost of insuring the property, insurance amounts, payments and interest are determined.

Cost of taxation real estate assets of legal entities and individuals is determined by accredited standards at tax inspections by expert appraisers on the basis of either the market or replacement cost of the real estate object. Currently, such assessment of real estate is carried out according to the normative methodology, taking into account the inventory value of the real estate and is based on replacement cost.

Liquidation value determined if the property must be alienated in a period less than the normal service life of similar objects and is clean a sum of money, which the owner of a property can receive during liquidation or forced sale.

Disposal cost is the net amount of money that the owner of a property can receive upon complete liquidation of the property.

Primary cost real estate object - the actual costs of acquiring or creating the object at the time of the start of its use.

Residual value real estate object - the cost of the object taking into account wear and tear.

Value of the property under existing use - the market value of the property, based on the continuation of its functioning in the conditions of possible sale on the market.

Operating enterprise cost - the cost of a single property complex, determined in accordance with the results of the functioning of the production that has been formed.

Collateral value - value for the purpose of securing a loan.

Cost of specialized facilities - the cost of objects that, due to their specific characteristics, cannot be sold on the market.

Rental rights cost real estate object - a one-time payment for the right to use and dispose of the object.

The price of real estate depends on a number of factors, which can be grouped as follows.

1. Objective factors determine average level prices of specific transactions by real estate entities. Among them, we should highlight: macroeconomic ones, related to the general market conditions (taxes, duties, dollar exchange rate dynamics, inflation, unemployment, level and conditions of wages, need for real estate, development foreign economic activity); microeconomic, characteristic objective parameters of specific transactions.

2. Factors associated with the phenomenon of mass consciousness and psychological nature (massive advertising, inflationary expectations, sympathy, awareness, etc.).

3. Physical factors: location - distance from the center, degree of development of infrastructure and transport links, architectural and constructive solutions, condition of the property, availability utilities, environmental and seismic factors.

4. Factors influencing the price and speed of sale: the number of similar offers, their relationship with the demand for this particular type of property in a certain part of the city; objective shortcomings of the object; prestige of the area; ecological situation in the area; transport links and infrastructure development of the area; social homogeneity at home; the nature of the transaction ("direct or "counter" sale"); legal "purity" of the object.

From world experience it is known that the main criterion of any operation is its profitability for both parties. However, everyone puts their own meaning into this concept. For one, money comes first. Such a seller can wait a long time for his client without reducing the price. For others, it is important to get free funds as quickly as possible. In this case, the speed of the operation comes first and the “time is money” principle applies. The third prefers a reliable buyer who can guarantee compliance with the payment schedule. It happens that during negotiations priorities also change. Skillfully judging between objective factors and own motives, the buyer and seller are able to conclude a mutually beneficial transaction and not be disappointed in its results.