Types of Appraisal Value

When it comes to determining the value of a property, there are a number of types of value that a real estate appraisal can determine. The most common types are listed below.

• Market value is the price at which an asset would trade in a competitive auction setting. Market value is usually synonymous with open market value or fair value.

• Value-in-use is the net present value (NPV) of a cash flow that an asset generates for an owner under a specific use. Value-in-use is usually below the market value of a property.

• Investment value is the value to one particular investor, and is usually higher than the market value of a property.

• Insurable value is the value of real property as indicated by an insurance policy. Generally it does not include the site value.

• Liquidation value may be analyzed as either a forced liquidation or an orderly liquidation and is a commonly sought standard of value in bankruptcy proceedings. It assumes a seller who is compelled to sell after a period of time that is less than the normal market time frame.

By: Present Value

Tags: appraisal value, Insurable Value, market value, value-in-use

This entry was posted on Tuesday, September 22nd, 2009 at 2:31 pm and is filed under Appraisal Terms, Real Estate Appraisal. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.