A Coffee Cup for a Realtor as well as a Property Valuer - Methodology to Arrive the Rate for a Resale Apartment
The Aim of this article :
Generally, while reselling an apartment in a metropolitan city or a cosmopolitan city, the sellers quote a price and they are doubtful about their own rate quote. This article aims to throw light on the traditional method of obtaining the rate/sq.ft by professional valuers.
I shall explain the same concept with a practical example.
A customer X is having an apartment at Avadi. The age of the building is around 7 years. The super built-up area of the apartment is around 1240 sq.ft.
The first step to get done is to measure the carpet area of the apartment. This shall be done by taking the measurements of each room (wall to wall - inner length and width).
Then the internal area of each room is obtained by multiplying the length and width.
The next step would be to add all the inner carpet areas of each room to achieve the total carpet area of the flat.
The loading of (the common areas + wall thickness) = Super built up area / Total Carpet area
This loading shall be in the range of 20 to 35%, which is considered as a normal loading.
If it is more than 35%, then the case should get analysed as of why so?
So, for a flat of 1240 sq.ft,
For 35% loading, 1.35 = 1240/carpet area
hence, carpet area = 1240/1.35
= 918.51 sq.ft
For 20% loading, 1.20 =1240/carpet area
So, carpet area = 1240/1.20
= 1033.33 sq.ft
Hence, here I am arriving at the tentative carpet area, even without measuring the apartment.
Now, we can go and measure it at the site and check the carpet area. If the carpet area is in the range of 918 sq.ft to 1033 sq.ft, then it is a normal loading.
i.e., we can say that the builder is genuine in giving the facility as offered in the document.
Now, we shall look into the rate part.
I shall take a rate feedback of minimum 3 projects which are brand new in that same locality.
If we are able to find a flat promoter of the same potential as that of our flat to get evaluated, then one feedback is also enough.
Here I can say that the potential can depend on the factors such as the flat interiors, type of flooring, lift facility, car park type and other special amenities.
So, In this case, I took the rate offered by the flat promoter of the same potential. The rate was Rs. 3800/sq.ft.
Depreciation for a resale flat is generally 1.5% per year.
So, 3800 x 1.5 /100 = 57
and for 7 years, the depreciation would be = 57 x 7
= 399
Now, this 399 Rupees should be deducted from 3800 = 3800 -399
= 3401
Hence the flat rate would be = 1240 x 3401
= Rs.4217240
= Rs. 42 lakhs
This is the simple method to evaluate the depreciated rate while reselling a flat.
Article dated : 25/07/2018
---An Article by Bharath Dhanasekaran -- --
The Aim of this article :
Generally, while reselling an apartment in a metropolitan city or a cosmopolitan city, the sellers quote a price and they are doubtful about their own rate quote. This article aims to throw light on the traditional method of obtaining the rate/sq.ft by professional valuers.
I shall explain the same concept with a practical example.
A customer X is having an apartment at Avadi. The age of the building is around 7 years. The super built-up area of the apartment is around 1240 sq.ft.
The first step to get done is to measure the carpet area of the apartment. This shall be done by taking the measurements of each room (wall to wall - inner length and width).
Then the internal area of each room is obtained by multiplying the length and width.
The next step would be to add all the inner carpet areas of each room to achieve the total carpet area of the flat.
The loading of (the common areas + wall thickness) = Super built up area / Total Carpet area
This loading shall be in the range of 20 to 35%, which is considered as a normal loading.
If it is more than 35%, then the case should get analysed as of why so?
So, for a flat of 1240 sq.ft,
For 35% loading, 1.35 = 1240/carpet area
hence, carpet area = 1240/1.35
= 918.51 sq.ft
For 20% loading, 1.20 =1240/carpet area
So, carpet area = 1240/1.20
= 1033.33 sq.ft
Hence, here I am arriving at the tentative carpet area, even without measuring the apartment.
Now, we can go and measure it at the site and check the carpet area. If the carpet area is in the range of 918 sq.ft to 1033 sq.ft, then it is a normal loading.
i.e., we can say that the builder is genuine in giving the facility as offered in the document.
Now, we shall look into the rate part.
I shall take a rate feedback of minimum 3 projects which are brand new in that same locality.
If we are able to find a flat promoter of the same potential as that of our flat to get evaluated, then one feedback is also enough.
Here I can say that the potential can depend on the factors such as the flat interiors, type of flooring, lift facility, car park type and other special amenities.
So, In this case, I took the rate offered by the flat promoter of the same potential. The rate was Rs. 3800/sq.ft.
Depreciation for a resale flat is generally 1.5% per year.
So, 3800 x 1.5 /100 = 57
and for 7 years, the depreciation would be = 57 x 7
= 399
Now, this 399 Rupees should be deducted from 3800 = 3800 -399
= 3401
Hence the flat rate would be = 1240 x 3401
= Rs.4217240
= Rs. 42 lakhs
This is the simple method to evaluate the depreciated rate while reselling a flat.
Article dated : 25/07/2018
---An Article by Bharath Dhanasekaran -- --
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