Professional Services: Appraisals

Because no two properties are identical and trading in property is relatively infrequent, it is often challenging to accurately assess property values. For this reason, qualified appraisers are frequently engaged to advise on the value of a property. Their reports are typically used as the basis for mortgage loans, estate settlement, divorce as well as for insurance purposes.

Experienced Professional
All appraisals are conducted by an experienced Chartered Valuation Surveyor, who has been providing residential appraisal services since 1983 and has been a Fellow of the Royal Institution of Chartered Surveyors since 1991. Our appraiser specializes in providing professional real estate services for residential and development appraisals and has worked closely with all Bermuda’s major banks.

Comprehensive Methodology
There are three general methodologies for determining value that we employ. These approaches are generally independent of each other and at least one will be appropriate for most valuation scenarios.

  • Cost Approach:
    The fundamental premise of the cost approach is that a potential purchaser will not pay more for a property than it would cost to build an equivalent. In other words, the value of a property can be estimated by summing the land value and the depreciated value of any improvements. The cost approach is considered most reliable when used on newer structures but the method tends to become less reliable for older properties.

  • Income Approach:
    The income approach is more mathematical in nature and is similar to methods used for financial valuation. In essence, it is based on capitalizing the rental income stream a property could generate and then dividing this annual net operating income by an appropriate capitalization rate. This approach to valuation is best suited for properties that are typically purchased by investors such as apartment buildings or office buildings.

  • Sales Comparable Approach:
    The sales comparable approach is frequently the most useful for buyers and sellers of residential property who would rather compare prices rather than theoretical models. Based primarily on the principle of substitution, this approach assumes a prudent individual will pay no more for a property than it would cost to purchase a comparable substitute property. To determine value, the appraiser will compare the property with similar homes, taking into account such factors such as lot size, square footage, style and age of house, date of sale, location, style and amenities.

Customers can request either a short form”Opinion of Value” report or a “Full Appraisal” which is a comprehensive report that provides greater detail. In either case, you are provided with a clear opinion of market value with underlying rationale and relevant sales and listing comparables.

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