Analytical Method for Correction Coefficient Determination for Applying Comparative Method for Real Estate Valuation
Real estate valuation uses 3 main approaches: income, cost and comparative. When applying the comparative method, correction coefficients based on similar real estate transactions are determined. In practice, the coefficients and similar real estate objects are usually determined by using qualitativ...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Sciendo
2020-06-01
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| Series: | Real Estate Management and Valuation |
| Subjects: | |
| Online Access: | https://doi.org/10.1515/remav-2020-0015 |
| _version_ | 1818609432932646912 |
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| author | Gružauskas Valentas Kriščiūnas Andrius Čalnerytė Dalia Navickas Valentinas |
| author_facet | Gružauskas Valentas Kriščiūnas Andrius Čalnerytė Dalia Navickas Valentinas |
| author_sort | Gružauskas Valentas |
| collection | DOAJ |
| description | Real estate valuation uses 3 main approaches: income, cost and comparative. When applying the comparative method, correction coefficients based on similar real estate transactions are determined. In practice, the coefficients and similar real estate objects are usually determined by using qualitative approach based on the valuators’ experience. The paper provides an analytical method for the determination of correction coefficient, which limits subjectivity when using the comparative method for valuation. The provided analytical approach also integrates macroeconomic indicators in the calculation process. It also addresses issues when available historical real estate transaction data is limited. A machine learning approach was applied to determine the average price of real estate in the region, with the possibility of using this information to obtain correction coefficients where historical data was unavailable. Alternative research usually focuses on final price estimation of the selected real estate object; however, the valuation standard of Tegova released in 2018 does not allow for applying analytically based approaches for individual real estate object evaluation; these approaches can be used only as a supportive tool for valuators. |
| first_indexed | 2024-12-16T14:58:27Z |
| format | Article |
| id | doaj.art-3e7a70b4d5704bb6916a0516eb4b1487 |
| institution | Directory Open Access Journal |
| issn | 2300-5289 |
| language | English |
| last_indexed | 2024-12-16T14:58:27Z |
| publishDate | 2020-06-01 |
| publisher | Sciendo |
| record_format | Article |
| series | Real Estate Management and Valuation |
| spelling | doaj.art-3e7a70b4d5704bb6916a0516eb4b14872022-12-21T22:27:20ZengSciendoReal Estate Management and Valuation2300-52892020-06-01282526210.1515/remav-2020-0015remav-2020-0015Analytical Method for Correction Coefficient Determination for Applying Comparative Method for Real Estate ValuationGružauskas Valentas0Kriščiūnas Andrius1Čalnerytė Dalia2Navickas Valentinas3Kaunas University of Technology, School of Economics and Business, Digitalization Scientific GroupKaunas University of Technology, Faculty of Informatics, Department of Applied InformaticsKaunas University of Technology, Faculty of Informatics, Department of Applied InformaticsKaunas University of Technology, School of Economics and Business, Academic Center of Economics, Business and ManagementReal estate valuation uses 3 main approaches: income, cost and comparative. When applying the comparative method, correction coefficients based on similar real estate transactions are determined. In practice, the coefficients and similar real estate objects are usually determined by using qualitative approach based on the valuators’ experience. The paper provides an analytical method for the determination of correction coefficient, which limits subjectivity when using the comparative method for valuation. The provided analytical approach also integrates macroeconomic indicators in the calculation process. It also addresses issues when available historical real estate transaction data is limited. A machine learning approach was applied to determine the average price of real estate in the region, with the possibility of using this information to obtain correction coefficients where historical data was unavailable. Alternative research usually focuses on final price estimation of the selected real estate object; however, the valuation standard of Tegova released in 2018 does not allow for applying analytically based approaches for individual real estate object evaluation; these approaches can be used only as a supportive tool for valuators.https://doi.org/10.1515/remav-2020-0015real estate valuationanalytical modelsmachine learningr32l85c55 |
| spellingShingle | Gružauskas Valentas Kriščiūnas Andrius Čalnerytė Dalia Navickas Valentinas Analytical Method for Correction Coefficient Determination for Applying Comparative Method for Real Estate Valuation Real Estate Management and Valuation real estate valuation analytical models machine learning r32 l85 c55 |
| title | Analytical Method for Correction Coefficient Determination for Applying Comparative Method for Real Estate Valuation |
| title_full | Analytical Method for Correction Coefficient Determination for Applying Comparative Method for Real Estate Valuation |
| title_fullStr | Analytical Method for Correction Coefficient Determination for Applying Comparative Method for Real Estate Valuation |
| title_full_unstemmed | Analytical Method for Correction Coefficient Determination for Applying Comparative Method for Real Estate Valuation |
| title_short | Analytical Method for Correction Coefficient Determination for Applying Comparative Method for Real Estate Valuation |
| title_sort | analytical method for correction coefficient determination for applying comparative method for real estate valuation |
| topic | real estate valuation analytical models machine learning r32 l85 c55 |
| url | https://doi.org/10.1515/remav-2020-0015 |
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