Valuations, Methods, Importance Presented by: Mark Farrell G.A.
Farrell & Associates Limited
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Why Value? The First Question is - The Value of What? Real
Estate
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Why Value? Several Different Types of Value Several Different
Standpoints e.g. your Home
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Value As Seen By - Yourself
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Value As Seen By - Buyer
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Value As Seen By - Bank
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Value As Seen By - Valuer
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Value As Seen By Tax Assessor
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Assessed Value
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Going-Concern Value
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Insurance Value
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Liquidation Value, Salvage Value MARKET VALUE
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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
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Market Value Wherein the parties had each acted knowledgeably
prudently and without compulsion
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Valuation Methodology How do Valuers arrive at Value? Most
Common - Sales Comparison Approach
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Often hear comments like: Market Is Inflated Actual Costs Are
Less It Is NOT Real Value
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Sales Comparison Approach
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Cost Approach
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Used For Special-Purpose Properties (Brewery, Church, Hospital)
In other Words, Properties that do not sell often Replacement Cost
less Depreciation
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Is Building Adequately Insured? Construction costs increasing
again Imperative to check building Insurance Failure = Financial
Hardship
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Are Buildings Adequately Insured? Sum Insured (S.I.)$1,000,000
Current Replacement Cost$1,500,000 Damage $600,000 Percentage of
CRC 40% Insurance Proceeds $400,000 Shortfall $200,000
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Income Approach
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Who is a Typical Buyer? An Investor What is Primary Concern?
INCOME!
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Income Approach Not Primarily Concerned With - Cost of Building
a Substitute Selling Price of a Substitute Significant Differences
in Commercial Properties Rent less Expenses Convert into Value
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Valuation Methodology Important Ingredients: Analytical Skills
Objectivity & Impartiality INFORMATION!
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Why Value? What is Importance of Value? Bank In case of Default
Insurance Company - In case of Damage You - In case of Purchasing /
Selling
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Why Value? What is Importance of Value? Investors - In case of
Measuring Return Values Change Over Time
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Price Movements 1973-2013
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Achieving Success Research shows to achieve Success Need Proper
Mentor. Some people choose Intelligent people Good-looking people
Sporting or singing stars.
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Achieving Success Choice affects chances of success!
Psychologists have designed several tests and quizzes Contain
numbers and personalities Actually shows chances of Success Allow
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!
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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....
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That is 1. George Clooney 2. President Obama 3. Bob Marley 4.
Russell Latapy 5. Dwight Yorke 6. Nelson Mandela 7. John Lennon 8.
Brian Lara 9. Mark Farrell 10. Mighty Sparrow
