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- Title
A logical operating model for the assessment of the forced sale value in the judicial procedures.
- Authors
Tajani, Francesco; Morano, Pierluigi; Locurcio, Marco; Amoruso, Paola
- Abstract
With reference to real estate auctions activated in the context of judicial procedures (ba nkruptcy and/or execut ive), this work d evelops and tests a logical operating model for the assessment of the forced sale value. This is determined from the market value of the asset by applying an appropriate discount (or premium) coefficient based on the potential risks of the urban and marke t context in which the pro pert y is located. The estimated coefficient a llows for determination of the auction value of the property to be sold which, due to yields obtainable and transaction risk, is admissible in terms of buyer convenience. The model proposed and tested here borrows Ellwood's logic as applied to the real estate sector, integrated thr ough the i nvestment risk assessment approach of Real Options Analysis. Applied in the one hundred and forty cities where t he Italian cour ts are based, the model allowed for the construction of an abacus of dis count (or premium) coefficients, differentiated in terms of the cities analyzed, the various areas of each cit y a nd the intended residential or commercial use. Putting in practice the applic at ion highlighted the validity of the model, capable of contextualizing the discoun t (or premium) coefficient needed to determine forced sale value based on the risk factors of the market areas considered. Practic al implicat ions of the abacu s include the possibility of limiting the times of auctioning procedures, as well as generating a map of the areas of greatest interest for potential investors, where the uncer tainty, typical of this s pecific real estate sub-market, is overcome by the know le dge of the limit values of investment convenience for the area under analysis.
- Subjects
REAL estate investment; MARKET value; AUCTIONS; URBAN planning; PROPERTY
- Publication
Valori e Valutazioni, 2021, Issue 29, p23
- ISSN
2036-2404
- Publication type
Article