A desktop valuation is a process of valuing a property through an automated valuation model (AVM). It is done without physical inspection and through available data from primary and secondary sources.
It is a predictive valuation model. Based on input provided by the user such as property address and its size etc., the algorithm finds out the nearest and most relevant comparable from the Liases Foras database. Then, depending upon the quality attributes of the property and its neighborhood profile, the application predicts the value of the property.
At present, Desktop Valuation provides the valuation of a residential property such as an apartment, independent house, and plot of land.
- It is instant
- It’s cost-effective
- It allows you to estimate the price depending on age, property attributes, neighborhood profile.
- It offers you extensive comparable data.
Sometimes, Yes and Sometimes, No.
It depends on the availability of the data and the quality of the data. In most cases when data was collected from primary sources by our team of surveyors, and the information was thoroughly verified for the user’s references.
However, in some cases, information collected may be secondary, such as estate agents, listing from portals that may not be accurate. In that case, our expert valuation advisory team can give you a detailed valuation.
It is reliable when:
- There is sufficient comparable data in the catchment of the subject property.
- The user has accurately filled in the property address, measurements, and characteristics of the property.
It is considered unreliable, and a full valuation will need to be ordered if:
- The property as restrictive land use and development control restriction.
- The user has filled in incomplete and inaccurate details for the property, such as an address, unit size, features, age, and surroundings.
- A desktop valuation won’t take any renovations into account; in this case, the valuation may come in lower than a full valuation.
- The property is unusual, for example, irregular site, site conditions, extraordinary features.
- There are few data available for comparison.
- If the desktop valuation report’s risk score is too high, a lender/buyer may order a full valuation instead.
A desktop valuation is typically valid for only 90 days whereas, a full valuation is usually valid for up to 3-6 months. However, in case of any changes in the micro and macro-economic environment and natural calamities, the valuation may not be valid in the specified period
You can get Instant results through Desktop Valuation.
For single-use, you can pay and use; click here to start; however, should you need multiple valuations or long-term subscription, click here to fill the request our professionals will be happy to take you through.
If a desktop valuation comes in lower than expected, you can always talk to our technical experts. We have an in-house valuation advisory team of architects, planners, and economics & finance professionals to assist you to get a full valuation.
So far, LiasesForas' desktop valuation offers the valuations and comparable for residential properties, which includes, apartments, independent houses, or a piece of the plot. It does not offer commercial office, retail, industrial or other kinds of asset classes.
Desktop valuation is for the use of all the stakeholders, individual buyers and sellers, Banks and Housing Finance Companies, Property Valuers, Landowners, and Developers.
Banks & HFCs- Lender can use it to periodically assess their entire portfolio valuation, current market value indexation, and risk assessment. They can use it for day to day requirement of mortgage valuation and for revalidation of valuation carried out by the other vendor Valuers.
Valuers - The interface provides extensive comparative data along with the property value and estimate
Individual buyer or seller - Before, buying or selling the property, an individual can use it to assess the market value of the property.
Developers - Project launches strategy, Land Purchase decision, Project pricing analysis, Marketing strategy, and much more detailed attributes.
Fund Houses - Due diligence on market, products, and developers, identify opportunities and risk in the market and New Market Entry Strategy, added with details of other important attributes.
Landowners - Unlocking the value of land banks, assessing the market trends of price, supply, and demand, and future outlook and other details on various attributes.
- 1. For HFC/ Banks: Overvaluation by the valuers will be checked.
- 2. For Consumers: In the opaque market the consumer will get the pricing insight, irrational prices will be checked.
- 3. Government: Rationality to calculate the ready reckoner market values more scientifically. Tax authorities may integrate it to curb the use of black money in real estate.
The valuation in the real estate is highly subjective and most of the time it reflects the perception of the valuers rather than the science through which the product is graded and valued. The same property valued by two valuers often seen to have their valuation varying quite a lot.
In the absence of scientific methods and tools of the valuation, the property valuation is often exploited by developers, by sellers and sometimes even by buyers. It puts the banking and mortgage industry and other stakeholders at risk. Besides, there is no yardstick for a buyer, through which apple to apple comparison can be drawn.
Most of the time valuers give reference to the price of other properties in the same locality for benchmarking, however, the quality of location, the quality of neighborhood profile, accessibility, and other features are not compared scientifically.
And the most important factor which creates maximum opacity in valuation is the factor of loading (super-built-up area). The loading appears to be the imaginary space (mark up being utilized by the developers), which has a huge impact on pricing. And there is no standard for this loading, depending on the volition of the developer, the loading varies.
What we mean is that apartment admeasuring 1000 sqft of carpet area can be sold as 1450 sqft (Saleable area) by one developer (say developer A) and the same 1000 sqft of carpet area apartment by another developer ( Say developer B)) may be being sold as 1650 sqft (Saleable Area) in the same locality and since most of the time rates are quoted as per sqft, often consumer gets disguised. Assume developer A is offering the property at 11000 per square feet and Developer B offering the property at 10000 per square feet. The consumer may find the property of developer B is cheaper.
|Carpet Area||Loading||Saleable Area||Per sqft Rate||Value in lacs|
There is an enormous variance in the loading as we move on the time series, we find that older properties were having the loading of 25%, which were developed in the '90s, however by 2000, the loading in properties increased to 30-45%, which post 2009, further increased to 65% to 70%. Comparing properties which were built at different timelines is complex and provides excessive differentiation in the pricing and valuation.
While loading provides huge opacity the other differentiating parameters for the pricing of the property being specific vectors of the property, neighborhood profile, views, building quality, age of the building, expected year of possession, unit quality, are not scientifically accounted and graded in general practices of valuation.
Subjective valuation has also created overvaluation woes, which has put the mortgage industry at risk of inflated assets.
Even though the valuation practice appears to be opaque, but prices across the whole cross-section of the city shows the pattern at any given point of time. We see a cascading pattern in prices from the city center to the periphery for circular and even for the noncircular or linear city.
One would often see a developer benchmarks its rate to a superior or inferior adjoining location. This benchmarking practice creates a cascading pattern of pricing. Besides, the qualitative aspects such as neighborhood profile, the convenience of the location, the product quality get integrated into the prices. Thus it forms a pattern that follows the dynamics whether it is a rational or irrational time of the market.
In a nutshell, we find that there is a specific ‘Price¬-Setting’ of a city at any given point of time and changes in one point of prices of this setting, alters the prices of all the other points of the cities and a new setting is formed. There is a behavioral pattern in prices across all the cities. Our research decoded that the price is an integration of four fundamental factors such as Distance, Density (Economic Density), Surrounding, and the Product. The price of a property is the integration of these four fundamental factors. These fundamental factors govern the prices of a city at any given point in time.
A multivariate regression equation integrating these fundamentals predicts the prices of given coordinate on earth for a differentiating product and differentiating geospatial characteristics with a very high correlation.
No, although the fundamental factors such as distance, density, surrounding, and product remain the same, however, their integration and importance vary from city to city. The cities with better circulation are seen to have higher importance of economic density.
- The scientific valuation module will help in bringing economic efficiencies.
- It will bring transparency in measuring the value of the property, the problem of overvaluation can be resolved.
- It provides a rationale framework for the taxation, stamp duty, and ready reckoner calculation, the Property detail can be defined through just a prescribed form value calculation.
- It will provide immense insight into urban planning and infra, especially to solve the problem of affordable housing.
- The overvaluation problem can be resolved by the adoption of the price productivity method of valuation. Once that is done, it will help in rationalizing the land cost, which is the biggest cause of economic imbalances.
- It provides a time saving revalidating to the mortgage and insurance industry to check overvaluation.
Liases Foras, founded in 1998, is the only non-brokerage real estate research company in India. Our 23+ years of industry experience makes us reliable and trustworthy.
Data and science (using AI and machine learning) form the core of our services, which range from providing market intelligence and risk advisory to lenders and mortgage companies to providing development advice, best use, and valuations to developers, funds, banks, and corporations. Hence you get high-end data and thorough verified information for your valuation.
There are three main ways banks value your property:
- Desktop valuation or an Automated Valuation Model (AVM) report from a data provider like Liases Foras.
- Kerbside valuation aka ‘drive-by valuations’ are valuations without the benefit of internal inspection of the property.
- Full valuation wherein, a certified valuer visits your property to carry out a full physical inspection to collect data and assess the state of the property.