Types of value

"I want to know the value of the property I want to buy." was the response of one of the clients who turned to our valuation services yesterday.

What can we understand from this answer? The fact that value is, from the client's perspective, the main element in the valuation process.  

But what is value? Value is an authoritative opinion, either on the most likely price that would be paid for an asset in an exchange or on the economic benefits arising from holding that good.

In a valuation process, regardless of the type of asset being valued, it is essential that the type of value is appropriate to the terms of reference and purpose of valuation, as the type of value can influence or even dictate the selection of valuation methods, inputs and assumptions and, ultimately, the valuer's conclusion on the value.

According to valuation standards, the types of value are defined as follows:

- Market value;

- Market rent;

- Fair value;

- Investment/subjective value;

- Fair value;

- The value of synergy;

- Liquidation value.

What does each type of value represent and what purpose is it for? To these two questions we will answer in a future article where we will detail all these aspects.

The valuer shall choose the relevant type(s) of value in accordance with the terms of reference and the purpose of the valuation. The identification and selection of a type of value must be carried out by the valuer taking into account the instructions and information received from the client and/or his representatives. For this reason, our recommendation is to provide the assessor from the beginning with all the requested information and documents in order to be able to understand and respond to your request.

If you have not yet found an assessor to answer all your questions related to the evaluation process, you can confidently turn to one of the FairValue evaluators.  The more than 70 licensed appraisers across the country, most of them seniors in the field, are ready to respond to any request. All you have to do is now turn to them with confidence.

We guarantee for their professionalism.