The process of buying an apartment can be divided into the following stages: finding an apartment, negotiations and signing of the preliminary agreement; preparing the closure and research of the apartment history; closure and registration of the deal.

Most apartments are still purchased for cash. On the day of the closure, the cash is deposited in a safe deposit box at a bank with access allowed to the seller only upon presentation of the registered paperwork for the apartment in the name of the new owner.

After depositing the cash, the parties sign and usually notarize the sale-purchase agreement. Upon the signing, the sale-purchase agreement is submitted for the state registration, which takes from 7 to 14 days. When the state registration is completed, the new owner actually acquires the right of ownership to the property.

Under Russian legislation, the right of use and the right of ownership and disposal are separate, so it is necessary to be very careful when securing that no strangers or sellers have the right of use to your property.

This is only one example of numerous subtleties and legal issues in real estate transaction in Russia/ It is very important to check the legal history of the apartment, as well as its privatization procedure. When buying an apartment, the use of a professional real estate agent to represent interests is strongly recommended.

Appraisal and Valuation of Real Property

Since property valuation is the basis of all real estate transactions, real estate li­censees should be familiar with the theoret­ical aspects and concepts of value, the forces that influence values, and the meth­ods by which such values may best be esti­mated. Each day clients will question the li­censee about such things as the value, fair price, fair rental, or fair basis for trade with respect to a particular piece of property. The licensee must be able to answer such questions correctly and in detail. The bro­ker must remember that when he accepts a listing he obligates himself to put forth his best efforts to find a buyer for the property, and he can only do so if he and the owner have set a fair price that will attract poten­tial purchasers.

Elements of value

For property to have value, four elements or characteristics must be present: (a) util­ity, (b) scarcity, (c) demand, and (d) transferability.

Utility refers to the usefulness of a particu­lar property. To have utility value, a prop­erty must have the ability to provide shel­ter, income, amenities, or whatever use is being sought. Utility involves the capacity of the property to produce income, and func­tional utility refers to the plan or layout of the property. Local ordinances, such as building codes and restrictions and zoning ordinances, affect the utility of a property.

Scarcity is the present or anticipated supply of a product in relation to the de­mand for it. A property that is relatively scarce and has the other characteristics of value is going to be worth more and sell for a higher price.

Demand is the desire to own a particular type of property, coupled with the financial ability to purchase it. Demand, to be effec­tive, must be implemented by purchasing power, which, with respect to real property, requires favorable economic conditions and interest rates.

Transferability refers to the ability to transfer title to property. Purchasers want a clear title, and, if it is clouded, restricted, or uncertain in some way, the demand will be affected and its value will be greatly de­creased.

Factors influencing value

Directional growth

In any estimate of value, attention should be paid to the directional growth of the area. This growth refers to the manner and direction in which the city or town tends to grow. Properties in the direction of growth tend to increase in value, especially if the growth is steady and rapid.

Location and environment

The value of all types of property is greatly affected by location, and, quite often, all other factors being equal, the location is the greatest determinant of the market value of a particular property. Environmental con­siderations include climate, topography, and transportation systems.

Social ideals and standards

These include population growth or decline; marriage, birth, and divorce rates; and reli­gious, educational, and recreational atti­tudes of the area.

Land composition

The type of soil, size, shape, and slope all affect the value of the property. It is easier to build on a level lot than on a sloping one, and shopping centers must always be on level land. View lots, however, which tend to be quite valuable, usually have quite a bit of slope, as do hillside properties. Addi­tional problems of slides and drainage play an important part in the determination of value for slope and hillside property.

Character of the neighborhood

The socioeconomic level of the neighborhood is a very important factor regulating value. The general age of the properties, the num­ber and quality of the schools, transporta­tion facilities, shopping centers, and recre­ational facilities are all quite important.

Economic trends

These include employment and business trends, wage levels, available money and credit, interest rates, tax loads, and popula­tion growth.

Political and governmental regulations

Included here are such items as building codes, health codes and regulations, zoning laws, fire regulations, credit controls, and government guaranteed and insured loans.

Different types of value

Although most individuals think of value as monetary value, it is interesting to note there are many types of value, such as:

- economic value;

- appraised value;

- potential value;

- bonk value;

- depreciated value;

- face value;

- cash value;

- exchange value;

- market value;

- salvage value;

- tax value;

- assessed value;

- replacement value;

- rental value;

- liquidation value;

- mortgage loan value;

- insurance value;

- leasehold value;

- nuisance value;

- equity value.

Highest and best use

When attempting to determine the value of real property, appraisers have traditionally incorporated the concept of highest and best use, which is defined as use most likely to produce the greatest net return to the property during a given time. It is a net return realized in terms of monetary profit or other such amenities. However, it is important to point out that in recent times the concept of highest and best use is no longer restricted to economic or profit-making characteristics. Environmental, rec­reational, and other aesthetic and historical considerations are now very important ele­ments in the valuation of real property.