How does a valuer actually decide the number?

By Parish Rao · 25 August 2026 · 6 minute read

People imagine a valuer walks around a property, forms an impression and writes down a figure. What actually happens is closer to arithmetic, and you can check it yourself once you know which method was used.

Three methods, and how the right one is chosen

Almost every property valuation in India uses one of three approaches, sometimes two together. Which one applies depends on the property, not on the valuer's preference.

1. Comparing with actual sales

The most common method, and the one used for most flats, houses and plots.

The valuer finds properties nearby that genuinely sold recently, then adjusts for the differences. Yours is on a higher floor. Theirs faces the main road. Yours is fifteen years older. Each difference moves the figure up or down, and the adjusted comparisons produce a value.

The strength of this method is that it rests on what people actually paid. Its weakness appears where nothing has sold nearby for a long time, which is common for large or unusual properties.

2. Land plus building

Used for houses, bungalows and older buildings where a direct comparison is hard.

The land is valued as if vacant, using sales of similar plots. The building is valued at what it would cost to construct today, less an allowance for age and wear. Add the two together.

This is why the age of a building matters so much in some reports and hardly at all in others. It also explains a result that surprises owners of old houses on good plots: most of the value is the land, and the structure contributes little. Our post on how land is valued covers that side in detail.

3. Income

Used where a property is bought for the rent it produces, which usually means commercial property.

The annual income is divided by a rate of return that investors in that market expect. A property earning more, or earning it more securely, is worth more. We explain the arithmetic in how commercial property is valued.

What the official rate has to do with it

Very little, and this confuses almost everyone. The circle rate or ready reckoner rate is a government floor for stamp duty. It is not the market value of your property, and a valuer does not simply copy it.

It appears in the report as one piece of evidence among several. Our post on circle rate versus market value untangles the two.

How to read your own report

Look for four things. Which method was used and why. What comparable sales are named, and whether they are real registered transactions. What measurements were taken on site. And whether the arithmetic is shown, so you could repeat it.

If a report gives a figure without those, it is an assertion rather than a valuation, and it is exactly the kind that gets challenged.

See how we prepare reports, or read the plain English introduction first.