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@article{ART001261234},
author={Jaeman Lim},
title={The Risk and Uncertainty in Real Estate Appraisals Process},
journal={The Korea Spatial Planning Review},
issn={1229-8638},
year={2008},
volume={57},
pages={65-77},
doi={10.15793/kspr.2008.57..004}

TY - JOUR
AU - Jaeman Lim
TI - The Risk and Uncertainty in Real Estate Appraisals Process
JO - The Korea Spatial Planning Review
PY - 2008
VL - 57
IS - null
PB - 국토연구원
SP - 65
EP - 77
SN - 1229-8638
AB - This paper addresses the risk and uncertainty of real estate appraisal, applies Monte Carlo simulation technique with discounted cash flow method to the value of real estate in order to explain the risk and uncertainty of real estate appraisal. The initial value of simulation are extracted from the office market data of Seoul, Korea. It assumes that the rent follows the geometric Brownian process, and base interest rate follows AR(1) process. The risk premium is estimated by real estate risk scoring method, which expresses the risk of real estate investment with risk score. This paper presents the results of simulation with variation in the components of income estimation(simulation #1), or risk factors of discounted rate estimation(simulation #2), and together(simulation #3). The range of present value of simulation #1 is largest, simulation #3 is next, simulation #2 is most narrow. I conclude that risk scoring method is reliable tool to enhance the performances of simulation, and that with simulation technique, the risk and uncertainty of real estate appraisal could be identified, understood, applied to various purposes by various users of the appraisal reports.
KW - Uncertainty of Real Estate Appraisal;Monte Carlo Simulation;Risk Scoring Method
DO - 10.15793/kspr.2008.57..004
ER -

Jaeman Lim. (2008). The Risk and Uncertainty in Real Estate Appraisals Process. The Korea Spatial Planning Review, 57, 65-77.

Jaeman Lim. 2008, "The Risk and Uncertainty in Real Estate Appraisals Process", The Korea Spatial Planning Review, vol.57, pp.65-77. Available from: doi:10.15793/kspr.2008.57..004

Jaeman Lim "The Risk and Uncertainty in Real Estate Appraisals Process" The Korea Spatial Planning Review 57 pp.65-77 (2008) : 65.

Jaeman Lim. The Risk and Uncertainty in Real Estate Appraisals Process. 2008; 57 65-77. Available from: doi:10.15793/kspr.2008.57..004

Jaeman Lim. "The Risk and Uncertainty in Real Estate Appraisals Process" The Korea Spatial Planning Review 57(2008) : 65-77.doi: 10.15793/kspr.2008.57..004

Jaeman Lim. The Risk and Uncertainty in Real Estate Appraisals Process. The Korea Spatial Planning Review, 57, 65-77. doi: 10.15793/kspr.2008.57..004

Jaeman Lim. The Risk and Uncertainty in Real Estate Appraisals Process. The Korea Spatial Planning Review. 2008; 57 65-77. doi: 10.15793/kspr.2008.57..004

Jaeman Lim. The Risk and Uncertainty in Real Estate Appraisals Process. 2008; 57 65-77. Available from: doi:10.15793/kspr.2008.57..004

Jaeman Lim. "The Risk and Uncertainty in Real Estate Appraisals Process" The Korea Spatial Planning Review 57(2008) : 65-77.doi: 10.15793/kspr.2008.57..004