Home Appraisal FAQs - Appraisals What are the types of real estate value?
What are the types of real estate value?

Types of Real Estate ValueThere are several types and definitions of value sought by a real estate appraisal. It is important to know or specify which type of value that is to be estimated. The most common values are:

  • Market Value - is 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 wherein the parties had each acted knowledgeably, prudently, and without compulsion. See here for most used definition of market value: FNMA defined Market Value.
  • Value-in-use – The net present value (NPV) of a cash flow that an asset generates for a specific owner under a specific use. Value-in-use is the value to one particular user, and 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 covered by an property insurance policy. Generally it does not include the value of the site. 
  • 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. Variations of this value is also used in foreclosure/REO, distressed sale and relocation. It assumes a seller who is compelled to sell after an exposure period which is less than the market-normal time frame.

Still have a questions?  Nexus Analytix™ can provide answers for your real estate appraisal questions. Please contact our offices at, Phone: (856) 985-0008 or by e-mail.

 

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