Abstract
The conducted researches aimed to analyze modern models and methods of implementation of the comparative approach in property and real estate appraisal, to investigate and evaluate their effectiveness, to suggest ways of further improving the methods of property valuation. To achieve this aim, the authors carried out a series of computational experiments on a computer. The essence of these experiments was the comparative evaluation of the cost of test properties based on the following methods: expert evaluation, solving systems of linear algebraic equations, based on the normalized distances in the space of pricing factors and the correlation-regression method. An analysis was made of the influence of methods of digitizing the initial data (pricing factors) on the final cost of real estate. On the basis of the studies, prospective ways and directions for further improvement of the methods of property valuation are determined.
Highlights
In conditions of active reformation of property relations, the need for services for valuation of property and property rights is regularly growing
Computational experiment to study the sensitivity of the methods under consideration to implement a comparative approach in the valuation of property and real estate according to the procedure for digitizing the initial data
The main methods that implement a comparative approach in the valuation of property and real estate is the method of expert evaluation, the method of calculating corrective corrections based on the solution of a system of linear equations, the method of calculating corrective corrections based on the normalized distances in the space of pricing factors, and the correlation-regression method
Summary
In conditions of active reformation of property relations, the need for services for valuation of property and property rights is regularly growing. The problems of property valuation related to property alienation, property disputes, the problem of land reform, the formation of an alternative model of partnership between the public and private sectors, require objective decisions of the appraisal expertise [1−6]. There is a need to improve the toolkit of the procedure for conducting property valuation by applying modern mathematical models and methods to obtain an objective market value of property and to make effective management decisions. 2. Literature review and problem statement To date, property valuation in Ukraine [7], as in the countries of Europe [5], Australia [6] is conducted according to 3 main approaches: comparative, profitable and costly, each of which has advantages and disadvantages (Table 1)
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