Comprehensive Real Estate Property Appraisal Seminar and Training (CREASAT)
PHILIPPINE ASSOCIATION OF REALTY APPRAISERS, INC.
WHY VALUE CONCEPTS DIFFER
Value has many different meanings
Generally, value is the monetary worth of goods or services to people The different interpretations of value make it very subjective due to each personal desires, needs, benefits, interests or possible uses of a thing.
Comprehensive Real Estate Property Appraisal Seminar and Training (CREASAT)
PHILIPPINE ASSOCIATION OF REALTY APPRAISERS, INC.
DIFFERENT VALUE TYPES AND CONCEPTS
Assessed Value Rental Value Book Value Salvage Value Cash Value Scrap Value Depreciated Value Sentimental Value Face Value Sound Value Foreclosure Value Capricious Value Insurance Value Leasehold Value Liquidation Value Present Value Loan Value Going Concern Value Market Value Comprehensive Real Estate Property Appraisal Seminar and Training (CREASAT) PHILIPPINE ASSOCIATION OF REALTY APPRAISERS, INC.
VALUE-IN-USE VS. VALUE-IN-EXCHANGE
Value-in-use - refers to the value of an item or object to a particular user. This is the subjective value concept Value-in-exchange describes the value of a thing to people in general. This can be termed as theobjective value. - Can be estimated only for items or properties that are commonly bought and sold in the market for money
Comprehensive Real Estate Property Appraisal Seminar and Training (CREASAT)
PHILIPPINE ASSOCIATION OF REALTY APPRAISERS, INC.
Fair Market Value (FMV)
FMV is the highest price estimated in
terms of money which a property will bring if exposed for sale in the open market allowing a reasonable time to find a purchaser, particularly those buyers with knowledge of all the uses to which the propoerty is adapted and for which it is capable of being used.
Comprehensive Real Estate Property Appraisal Seminar and Training (CREASAT)
PHILIPPINE ASSOCIATION OF REALTY APPRAISERS, INC.
Fair Market Value (FMV)
Continued
Implicit in the definition is the consummation of
a sale as of a specified date and the passing of title from seller to buyer under the following conditions: Buyer and seller are typically motivated; Both parties are well informed and advised, each acting in what he considers his own best interest; A reasonable time is allowed for exposure in the open market; Payment is made in cash or its equivalent consideration; No abnormal Comprehensive pressure. Real Estate Property Appraisal Seminar and Training (CREASAT) PHILIPPINE ASSOCIATION OF REALTY APPRAISERS, INC.
Fair Market Value (FMV)
Continued
The following terms are further expressed in
the definition: Highest price fair amount agreed by both parties In terms of money price expressed in the usual medium of exchange Reasonable time timeframe within which a property may be sold Knowledgeable buyer/seller prudent and knowledgeable parties No abnormal pressure both parties not compelled to buy or sell Comprehensive Real Estate Property Appraisal Seminar and Training (CREASAT) PHILIPPINE ASSOCIATION OF REALTY APPRAISERS, INC.
Market Value (MV)
Market Value is the amount for
which an asset could be exchanged between a willing buyer and willing seller in arms length transaction after proper marketing, wherein the parties had each acted knowledgeably, prudently and without compulsion. Comprehensive Real Estate Property Appraisal Seminar and Training (CREASAT) PHILIPPINE ASSOCIATION OF REALTY APPRAISERS, INC.
Market Value (MV)
Continued Arms length transaction means Buyer and seller are not related in any way; The product has been on the market for a length of time that is reasonable for products of that type; Neither buyer nor seller is acting under duress; There are no financing or other concessions beyond what is customary in the marketplace.
Market is a set of arrangements in which buyers and
sellers are brought together through price mechanism. It is where buyers and sellers interact, compete and cause identifiable changes in prices. Comprehensive Real Estate Property Appraisal Seminar and Training (CREASAT) PHILIPPINE ASSOCIATION OF REALTY APPRAISERS, INC.
Asking, Offering and Selling Price
Asking price is what the seller indicates will
be an acceptable offer
Offering price is what a buyer actually offers
Selling/Consummated price is what the
seller and buyer finally agreed on. Note: All of these may be different from the propertys market value, as determined by an appraiser, and none of them may be exactly the same as the estimated market value.
Buyers market one in which there are significantly more properties
available for sale than buyers available to purchase them.
Comprehensive Real Estate Property Appraisal Seminar and Training (CREASAT)
PHILIPPINE ASSOCIATION OF REALTY APPRAISERS, INC.
DEFINITION OF MARKET VALUE
The most probable price which a property
should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently, knowledgeably, and assuming the price is not affected by undue stimulus.
Comprehensive Real Estate Property Appraisal Seminar and Training (CREASAT)
PHILIPPINE ASSOCIATION OF REALTY APPRAISERS, INC.
Emer F. Gonzalez emerfgonz@yahoo.com
Comprehensive Real Estate Property Appraisal Seminar and Training (CREASAT)