Understanding Different Methods for Valuing a Home
When you consider the value of your home, you probably think of the value in only one way - How much money could I get for my house if I sold it? But, did you know that there are actually many different ways to look at the "value" of a property? In fact, when you get your home professionally appraised, you may receive several appraisal values based upon the various definitions used within the real estate industry. These values may be defined as any of the following:
Market Value
Value-In-Use
Investment Value
Insurable Value
Liquidation Value
With so many different methods used for determining the value of a home, it is a good idea to have a better understanding of these valuation methods so you can better understand the true value of your property.
Market Value
Market Value, which is also commonly referred to as the Fair Value or the Open Market Value of a property is an estimate of how much a buyer would likely be willing to pay for the home. This method of valuation is the one that is most commonly determined by professional appraisers, with the value being largely determined by assessing the price at which other similar properties had recently been sold.
Value-In-Use
The Value-In-Use valuation is generally lower than the Market Vale price. This is because the value is determined based upon the value the property holds to one particular user.
Investment Value
Unlike the Value-In-Use value, the Investment Value of a property is often greater than the Market Value. This is because the Investment Value is based upon the value the property holds for an investor. In order for a property to be worth investing, the investor must have some reason to believe he or she can make money from the property. The investment value may be higher if the owner has special benefits, such as grandfathered zoning, agglomeration benefits and exceptional financing terms.
Insurable Value
The Insurable Value of a property is the value at which the property should be insured. This value is generally based on the structure only and does not include other aspects of the property, such as the value of the land.
Liquidation Value
The liquidation value of a property is also often referred to as the forced liquidation or orderly liquidation value. The liquidation value of the property is the value that is used during bankruptcy proceedings. This value is generally lower than the Market Value because if it is determined based upon the amount the seller is likely to receive when trying to sell the home faster than the timeframe most homes stay on the market.
Regardless of the method used to value the property, it is important to note that the Market Value is not necessarily the amount you will receive when putting the home on the market. Rather, it is simply a guideline to help you get a general idea of how much you should shoot for when selling your home.
About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for http://www.electronicappraiser.com/, which is a leading provider of on-line home appraisals and offers a nationwide personalized instant informational report about home appraisal. For more information, please visit .
http://www.electronicappraiser.com.
Market Value
Value-In-Use
Investment Value
Insurable Value
Liquidation Value
With so many different methods used for determining the value of a home, it is a good idea to have a better understanding of these valuation methods so you can better understand the true value of your property.
Market Value
Market Value, which is also commonly referred to as the Fair Value or the Open Market Value of a property is an estimate of how much a buyer would likely be willing to pay for the home. This method of valuation is the one that is most commonly determined by professional appraisers, with the value being largely determined by assessing the price at which other similar properties had recently been sold.
Value-In-Use
The Value-In-Use valuation is generally lower than the Market Vale price. This is because the value is determined based upon the value the property holds to one particular user.
Investment Value
Unlike the Value-In-Use value, the Investment Value of a property is often greater than the Market Value. This is because the Investment Value is based upon the value the property holds for an investor. In order for a property to be worth investing, the investor must have some reason to believe he or she can make money from the property. The investment value may be higher if the owner has special benefits, such as grandfathered zoning, agglomeration benefits and exceptional financing terms.
Insurable Value
The Insurable Value of a property is the value at which the property should be insured. This value is generally based on the structure only and does not include other aspects of the property, such as the value of the land.
Liquidation Value
The liquidation value of a property is also often referred to as the forced liquidation or orderly liquidation value. The liquidation value of the property is the value that is used during bankruptcy proceedings. This value is generally lower than the Market Value because if it is determined based upon the amount the seller is likely to receive when trying to sell the home faster than the timeframe most homes stay on the market.
Regardless of the method used to value the property, it is important to note that the Market Value is not necessarily the amount you will receive when putting the home on the market. Rather, it is simply a guideline to help you get a general idea of how much you should shoot for when selling your home.
About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for http://www.electronicappraiser.com/, which is a leading provider of on-line home appraisals and offers a nationwide personalized instant informational report about home appraisal. For more information, please visit .
http://www.electronicappraiser.com.
posted by Electronic Appraiser at
10:11 AM
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