Why Value?
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Transcript of Why Value?
G.A. Farrell & Associates Limited CHARTERED VALUATION AND QUANTITY SURVEYORS
Why Value?Valuations, Methods, Importance
Presented by:Mark FarrellG.A. Farrell & Associates Limited
Why Value?The First Question is - The Value of What?Real Estate
Why Value?Several Different Types of ValueSeveral Different Standpointse.g. your Home
Value As Seen By - Yourself
Value As Seen By - Buyer
Value As Seen By - Bank
Value As Seen By - Valuer
Value As Seen By Tax Assessor
Assessed Value
Going-Concern Value
Insurance Value
Liquidation Value, Salvage Value MARKET VALUE
Market Value The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arms-length transaction after proper marketing
Market Value Wherein the parties had each acted knowledgeablyprudently and without compulsion
Valuation MethodologyHow do Valuers arrive at Value?Most Common - Sales Comparison Approach
Sales Comparison Approach
Sales Comparison ApproachOften hear comments like:Market Is InflatedActual Costs Are LessIt Is NOT Real Value
Sales Comparison Approach
Cost Approach
Cost ApproachUsed For Special-Purpose Properties (Brewery, Church, Hospital)In other Words, Properties that do not sell often Replacement Cost less DepreciationIs Building Adequately Insured?Construction costs increasing again
Imperative to check building Insurance
Failure = Financial HardshipAre Buildings Adequately Insured?Sum Insured (S.I.)$1,000,000Current Replacement Cost$1,500,000Damage $600,000Percentage of CRC 40%Insurance Proceeds $400,000
Shortfall $200,000
Income ApproachIncome ApproachWho is a Typical Buyer?An InvestorWhat is Primary Concern? INCOME!
Income ApproachNot Primarily Concerned With -Cost of Building a SubstituteSelling Price of a SubstituteSignificant Differences in Commercial PropertiesRent less ExpensesConvert into Value
Valuation MethodologyImportant Ingredients:Analytical SkillsObjectivity & ImpartialityINFORMATION!
Why Value? What is Importance of Value?Bank In case of DefaultInsurance Company - In case of DamageYou - In case of Purchasing / Selling
Why Value? What is Importance of Value?Investors - In case of Measuring ReturnValues Change Over Time
Price Movements 1973-2013Achieving SuccessResearch shows to achieve Success Need Proper Mentor.Some people choose Intelligent peopleGood-looking peopleSporting or singing stars.
Achieving SuccessChoice affects chances of success! Psychologists have designed several tests and quizzes Contain numbers and personalities Actually shows chances of SuccessAllow me to try on of the quizzes and we will see if it is of benefit to you, ok? Remember however, I am NOT a Psychologist!
Achieving Success:Pick a number from 1-9......... Times this number by 3.........Then add 3............... ......... Then times by 3 again...........You should have a two digit number.... Add these two numbers together.....You then should be left with a single digit number which will tell you who your all time FAVORITE PERSON is....That isGeorge Clooney President ObamaBob Marley Russell Latapy Dwight Yorke
Nelson MandelaJohn Lennon Brian LaraMark Farrell Mighty Sparrow
THANK YOU!
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