Market Value in Use vs. Market Value As Is

[Fred]

"market value in use" is pretty much a meaningless term.

The International Valuation Standards use the term "market value in existing use."

 

[PropertyEconomics]

The International Valuation Standards use the term "market value in existing use."

Do international standards apply to domestic assignments?

A joke by the way.

 

[rbrienza]

Say all of your neighbors have a wood non insulated garage door and you have a steel insulated garage door installed. You paid $2200 for the door, you may not get any value for the door because the market just expects a garage door. Therefore, your new insulated door is Value in Use. It is the law of contributory value.

 

[PL1957]

Say all of your neighbors have a wood non insulated garage door and you have a steel insulated garage door installed. You paid $2200 for the door, you may not get any value for the door because the market just expects a garage door. Therefore, your new insulated door is Value in Use. It is the law of contributory value.

No, I would think that would be a good example of a functional superadequacy. In order for there to be value in use, you would need to have a benefit to a specific enterprise that would exceed what the general market would pay for it. I don't see how you could make that argument for an insulated garage door.

 

[DWiley]

The International Valuation Standards use the term "market value in existing use."

Actually, that concept is no longer in the IVS. It was deleted for the most recent version.

 

[H.B. Userman]

Just curious, but when is a "Value in use" (or whatever, the proper term) appropriate?

 

[PL1957]

Just curious, but when is a "Value in use" (or whatever, the proper term) appropriate?

Whenever the client is willing to pay for it ...

I usually see value in use included in cases where the RE itself is only a component of the entire deal, or if the deal is going to be done regardless of what the RE is worth on a market value basis.

 

[H.B. Userman]

Does that mean that external obsolescence or functional inutility isn't considered unless it impacts the specific use??

 

[PL1957]

Does that mean that external obsolescence or functional inutility isn't considered unless it impacts the specific use??

That's usually the way we've looked at it - no external or functional