3 Perspective Market Value Essay

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OBJECT OF THIS ESSAY: Valuation is done for a variety of reasons, and it is also possible to have a whole range of different values for a given property at a given moment depending on the purpose of the valuation. The purpose of this thesis is to investigate the market value of property from three perspectives: market valuation for finance, market valuation for sale and purchase, and market valuation for investment. Market Valuation for Finance We treat market valuation for financial purposes. Financial institutions that finance property through debt or, very occasionally, equity, will not wish to make a loan unless there is some sort of security that makes it relatively certain that their capital can be retrieved. They investigate to “secure” the loan upon the property and they claim the capital lent out as “borrowed” property should the borrower default in any way. Therefore, a valuation for a financial institution is a valuation for a lender who does not want to take risks. In such a case, the valuation is to determine what sum a project, which can be reflected in gross retail value, is likely to fetch if a sale is accepted by the buyers. Since the objective of such a valuation is proposed property, it is obvious that it is not possible to put the property on the market to get a valid value for sale. The assessor thus has to predict appraised value for the pre- construction development based on a cautious view. To carry out such a valuation is often more difficult than for property that has been sold, and the assessed value can be considerably different from the figure the property is actually sold for, because the former is determined under favorable transaction circumstances. However, such a valuation is still useful for providing transaction information on property. Market Valuation for Sales and Purchases The viewpoint is changed from that

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