Correct Answer - Option 1 : Progression method
Explanation:
Valuation:
- The technique of finding the fair price of an existing building or property is known as valuation.
- Valuation of property is done to work out the amount of fair rent of a building, buying or selling of the property, etc., especially when it is requisitioned by the government or semi-government organization.
Valuation of land is done by following methods:
Belting method of valuation:
it is based on the road frontage. Frontage land has a greater value than back land. So in order to find out the real value of the land the entire plot is divided into a number of convenient strips by lines parallel to the center line of the road. Each such type of land is known as belt.
Direct comparison method:
When the rental value of the property is not known, this method is used. But the sale price of property as a whole is estimated and the capitalized value of the property is fixed by direct comparison with the capitalized value of the similar property.
Abstractive Method:
The abstractive method becomes useful when no information is available regarding land transactions in the nearby area or in other words, the value of land where sales are not occurring frequently can be worked out by the application of this method.
