1. The Comparative Approach
Ing. David Slavata, Ph.D.
Property Valuation

2. Principle
It is necessary to have at least two real estates with nearly no differences (flat A, flat B)
Flat A (valuated) the unknown price, the other especially technical and legal parametres are known
Flat B (comaprative) known price, known technical and legal parameters

3. Methods Direct comparative Using the coefficients
Professional balance sheet
Using the direct increases and reductions
Using the coefficients
Direct with no representative
Undirect with representative estate

4. Example
Valuate multiflat house in the village of Svatoňovice by comparative approach.
Built from bricks, insulated. In the house there are 4 similar flats 2+1. Appartement area 57m2. No balcony. Use the comapartive methodes. The year of construction: 1963.

5. The advertising database
Flat č.
Locality
Rooms
Price
Techn. condition 1
Velké Heraltice sádek
2+1
390000 - 2
Vítkov
3+1
650000 + 3
580000
Appreciated flat
Svatoňovice ?

6. Professional balance sheet methode
CV1 = 1/n x SUM SPi

7. Comparative Value Comparative Value 1 2 3 Velké Heraltice sádek 2+1
Flat
Locality
Rooms
Price
correction 0,85 1
Velké Heraltice sádek
2+1
390000 2
Vítkov
3+1
650000 3
580000
Comparative Value

8. Advantages and disadvantages
Simple methode
Assumption of high homogenity of flats
Timeliness
Sample of usage: Flats for instance

9. Methode of comparison,
1.Direct. Using of increases and reductions due the diferences between valuated and comparable flats.
2. Using the coefficients express of differences.

10. Direct methode using increases and reductions
CV2a = [(SPA +/- sum IRAi) x W1 + (SPB +/-sumIRBi) x W2 +….+(SPX +/- sum IRXi) x Wz] / W1 + W2+ … + Wz

11. Advertising database 1 2 3 Appreciated flat Velké Heraltice sádek 2+1
Locality
Rooms
Price
Techn. condition 1
Velké Heraltice sádek
2+1
390000 - 2
Vítkov
3+1
650000 + 3
580000
Appreciated flat
Svatoňovice ?

12. Calculation CV = (+390 x 0,85 + 50 +0 + 39 +650 x 0,85 – 100 – 50 – 50
CV = Kč/flat

13. Using the coefficients express of differences
CV2b = sum ISPCi / n
ISPCi = SPi / Idi
Idi = k1 x k2 x k3 x…..x kn

14. Procedure
To get the database with the comparative fltas as homogenuos as possible.
The bid prices of flats should be corrected by the reduction coefficient.
Selection of signs of differences should be set the coefficients of differences (k)
By multiplicating of coefficients we get the Indexes of differences for each comparative flat.
The selling price should be devided by the Index of difference for each flat.
By the average of adapted selling prices we get the comparative value of the the flat.

15. Sestavení databáze 1 2 3 Appreciated flat Velké Heraltice sádek 2+1
Locality
Rooms
Price
Techn. condition 1
Velké Heraltice sádek
2+1
390000 - 2
Vítkov
3+1
650000 + 3
580000
Appreciated flat
Svatoňovice ?

16. Creation of coefficients
K1……….. Rooms
K2……….. Locality
K3………. Technical condition

17. Value of coefficients K1: 2+1…….. 1,00 3+1……… 1,12 K2:
2+1…….. 1,00
3+1……… 1,12
K2:
Svatoňovice. 1,00
Vítkov…….. 1,12
Sádek……… 0,90 K3
Standard… 1,00
-…………… 0,90
+………… 1,1

18. Calculation Price Comparative Value Č. Cena Korekce 0,85 I 1 390 331,5
1,00 … 2
650
552,5
1,12 3
580
493
Comparative Value

19. Děkuji za pozornost