Price Versus Value ? Define Value.

[glenn walker]

The comps used are based on closed Sales- Prices. The buyer's purchase is based on getting the best price they can negotiate.

Nobody's ever been able or to define what value is to someone else but we continue to sign and certify that only
we the Appraisers Can Define Value.

I've always laughed as we sign something that nobody can define.

I can define what the most probable price point may be based on the sales used but nothing else.

 

[NC Appraising]

Price is what dummies pay for new construction homes...they go into the sales office with a lender approved maximum shopping limit.

Value is what the home would sale for if fully finished and exposed to the market. Most of the time it sells below the shopping spree pre-sale homes.

 

[TerryRohrer]

The comps used are based on closed Sales- Prices. The buyer's purchase is based on getting the best price they can negotiate.

Nobody's ever been able or to define what value is to someone else but we continue to sign and certify that only
we the Appraisers Can Define Value.

I've always laughed as we sign something that nobody can define.

I can define what the most probable price point may be based on the sales used but nothing else.

It is probably best you are not an appraiser!

 

[J Grant]

The comps used are based on closed Sales- Prices. The buyer's purchase is based on getting the best price they can negotiate.

Nobody's ever been able or to define what value is to someone else but we continue to sign and certify that only
we the Appraisers Can Define Value.

I've always laughed as we sign something that nobody can define.

I can define what the most probable price point may be based on the sales used but nothing else.

From above - "Nobody's ever been able to define what value is"... , lmao-

, USPAP presents: the definition of market value. It is in our appraisal and it serves the appraisal model for the client and intended users. Not a vague "someone else" We sign and certify the MV definition for the intended use.

If you think nobody can define what you signed, then you should have never have signed an apprasial report.

 

[glenn walker]

Price is what dummies pay for new construction homes...they go into the sales office with a lender approved maximum shopping limit.

Value is what the home would sale for if fully finished and exposed to the market. Most of the time it sells below the shopping spree pre-sale homes.

Then why do you use sales prices as your comparables and not sale's values ?

 

[J Grant]

The MV, as defined in the appraisal, applies to the appraisal and its client/ limited set of users. The rest of the world can believe whatever else they want about price or value .

 

[glenn walker]

It's not a correct definition of value.
Value is Purely subjective and akin to the definition of Ones Individual Perspective and you and I never look at a properties value through the same lenses.

That's why market participants make a purchase based on a Price they believe gives them the most utility and value for the price they end up paying. THE FORMS CERTIFICATION is wrong and misleading.

 

[alebrewer]

Its because of what you're describing that measures of central tendency become meaningful. IF the dispersion of your data set is rather wide, then I'd hazard that the 'prices' being used for the comparables MAY not reflect market value for those properties. In other words, one would expect more dispersion (higher SD if you will) if the sales prices of the comparables weren't truly reflective of their respective values (and assuming that they ARE truly comparable to the subject).


Of course, it could also mean that the sales you're using as comparables aren't very comparable to the subject.

 

[Fernando]

When I go to restaurants, you see the price on the menu but other considerations not considered.
Each restaurant is different with its value.
Even though the price is same, if the ambience is nice and service excellent, the price paid for the meal was satisfactory and worth the price.
We look at comp's sales price. Don't know whether it's above or below median market value.
At least we based on the comps price and determine best value for subject.

 

[J Grant]

It's not a correct definition of value.
Value is Purely subjective and akin to the definition of Ones Individual Perspective and you and I never look at a properties value through the same lenses.

That's why market participants make a purchase based on a Price they believe gives them the most utility and value for the price they end up paying. THE FORMS CERTIFICATION is wrong and misleading.

I hope you quit appraising before the fog set in -

Value is subjective, fine. Everyone can pay what they want and think what they want wrt whether they got a good deal or not. Of course, market participants pay a price. Doh. There is of course a correlation between price and value.

Again, the appraisal is nothing more than a value model developed per a methodology and using a value definition, for the use by a client and a limited set of users. For a stated use a lending decision, a listing price , dividing divorce proceeds, etc. Anyone else can value the property however they like.