Abstract
Abstract One of the key determinants of the quality of real estate mass appraisal is the algorithm used for conducting such an appraisal. Other determinants include detailed methodological and substantive solutions within the scope of a selected, applied algorithm. This article is dedicated to one of the major stages of the process of land real estate mass appraisal with the use of the Szczecin Algorithm of Real Estate Mass Appraisal (SAREMA), namely defining and determining the so-called elementary terrains. The paper aims to present the methods for designating the boundaries of elementary terrains, the manner of defining their number and size and, consequently, the number of real properties that will be covered by an automated process of mass appraisal in a given area. Ways of defining the boundaries of elementary terrains were proposed in the paper based on the existing surveying districts, zoning plans, background maps, thematic map layers, real estate market analyses as well as statistical methods. Elementary terrain boundaries thus designated were verified with the use of actual real estate resources of the city of Szczecin.
Highlights
In the practice of real estate appraisal, two entirely different situations may occur in terms of the appraisal process organization: 1. individual appraisal, 2. mass appraisal (JAHANSHIRI, BUYONG, SHARIFF 2011)
We deal with mass appraisal when (e.g. HOZER et al 2002; KURYJ 2007; TELEGA et al 2002): 1. the subject of an appraisal involves a large number of real properties of one type, 2. appraisal is to be conducted with a uniform approach resulting in cohesive results, 3. all the properties subject to appraisal are valued “at the same time”, assuming the same dates for establishing the property conditions and price level
The problems of specifying elementary terrains for mass appraisal were presented in the article, and in this particular case, with the use of the Szczecin Real Estate Mass Appraisal Algorithm
Summary
In the practice of real estate appraisal, two entirely different situations may occur in terms of the appraisal process organization: 1. individual appraisal, 2. mass appraisal (JAHANSHIRI, BUYONG, SHARIFF 2011). Typical areas in which mass appraisal is deemed to be useful include (HOZER et al 1999): property valuation for the purpose of updating annual perpetual usufruct charges, property valuation for the purpose of estimating the economic results of adopting or amending local zoning plans, monitoring the values of sets of real properties constituting securities of credit exposures held by a bank in order to calculate LtV for the bank’s credit portfolio (CHO, MEGBOLUGBE 1996, KORTEWEG, SORENSEN2016, TZIOUMIS 2017), universal real property taxation (BRADBURY, MAYER, CASE 2001). It ought to be based on the reliability of the determined cadastral values with a transparent appraisal structure and a relatively low number of distinctly defined and clearly presented real estate characteristics (cf. SAWIŁOW, AKIŃCZA 2011)
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