Applicative Study On Market Comparison Approach In Real Estate Appraisal Of Small Towns

As one of the prop industries, real estate industry plays an important role in the national economic development. The development of real estate industry escalates the related industries, and makes the whole economy enjoy a fast overall increase. The urbanization strategy and the fast economic development of small towns place real estate appraisal, a medium service profession, into a more and more important position, where the application of appraisal approach deserves more attention. Among all the ways of real estate appraisal in small towns, cost approach is applied most, but it has some defects. Thus, more scientific and practical approaches need to be introduced. Market comparison approach, one of three main approaches of real estate appraisal, can be scientific and practical, and its application is becoming mature. Moreover, introduction of mathematic methods and combination of quantitative and qualitative analyses make this approach more satisfactory and widen its application scale. So, it is necessary to study the application of market comparison approach to real estate appraisal in small towns.There are three problems when real estate price is appraised by means of market comparison approach, namely, collection of cases, revision of index factors and determination of appraisal results. The major problem is the collection of cases in the areas where market comparison approach can be properly used. The condition is that there are enough cases within a comparable search area, but it is difficult to collect enough in small towns. However, cases can be collected from adjoining small towns. This paper extensively analyzes the definition of comparable search area, factors influencing real estate price and relation of supply and demand as for whether adjoining towns can meet the demands of a comparable search area, and proposes the use of market comparison approach in small town real estate appraisal. First, to select from adjoining towns similar ones that are at the same development level as the town where the real estate to be appraised is located. Second, to select cases from similar towns. Finally, to appraise real estate according to usual steps of market comparison approach. Similar degree and similar selection in principle of fuzzy math are used in selection of similar towns. First, to select the characteristic factors which can reflect the synthetic level of small town development; second, to definite fuzzy evaluation method and to figure out subordinate degree; third, to calculate the similarity degree between surrounding small towns and the one where the real estate to be appraised is located; last, to determine similar towns according to similarity degrees on the basis of similar selection in principle.