Valuation of Improvements Only

[J Grant]

lol echoes of the can there be a negative market value marathon topic of old...

 

[glenn walker]

Price versus Value - I choose Price as I have no idea what value is to another person as its all about ones perspective and opinion. I think this is why NAR and Realrors were smart to never have allowed themselfs to
get caught into the value trap and not be under a USPAP type of document.

 

[Ricky LaFleur]

I reread the OP as directed and the question posed was "How would you go about valuing the improvements alone on a real property?"

We can all interpret the intent in an effort to make ours the only correct response, but that doesn't make it so. "Valuing the improvements alone" seems fairly specific to me, and doesn't clearly imply that the value of the improvements as if they were part of something else is the unknown in question.

Terry, I said "valuing the improvements along on a real property", and not "valuing the improvements if moved, sold off for scrap, etc".

The OP also states no HCs or EAs are necessary, yet in those scenarios where the value of the whole minus land value are proposed, assumptions are being made. Specifically, the value of the improvements alone, as a part of the whole, is dependant on the value of the land on which they currently sit.

No HC/EA is needed per USPAP to complete this, as no assumption or hypothetical is being made here. It's a part of the real property, not hypothetical or an assumption. Which is why I laid out the details of the real property.

But if a specific tract of land is not in the picture, clearly that can not be a viable option, and it does not reveal the market value of the improvements by themselves.

A specified tract of land IS in the picture, but not part of the value. The improvements of the real property are being valued alone but not separated from the real property on which they are located.

Anything valued at what the market would pay is market value. OTOH - the definition of market value cited above is referring to real property. There are MANY definitions of market value - hence our requirement to cite the definition and source in our reports.

Do you think that to value the improvement portion of a piece of real property that a different definition must be used?

 

[alebrewer]

Terry, I said "valuing the improvements along on a real property", and not "valuing the improvements if moved, sold off for scrap, etc".


No HC/EA is needed per USPAP to complete this, as no assumption or hypothetical is being made here. It's a part of the real property, not hypothetical or an assumption. Which is why I laid out the details of the real property.


A specified tract of land IS in the picture, but not part of the value. The improvements of the real property are being valued alone but not separated from the real property on which they are located.


Do you think that to value the improvement portion of a piece of real property that a different definition must be used?

I think I would, as the Fannie definition applies to real property only.

 

[Terrel L. Shields]

The above is what market value consists of

Far far from the only one...

Market value is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts.

FNMA is not the know all end all of "market value" and OP explicitly excluded it.

 

[Terrel L. Shields]

I think I would, as the Fannie definition applies to real property only.

again, OP excluded this as a FNMA assignment.

 

[alebrewer]

again, OP excluded this as a FNMA assignment.

Of course you should never use a f/f form for non-agency work... surprising, though, how many folks do.

 

[J Grant]

Far far from the only one...

Market value is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts.

FNMA is not the know all end all of "market value" and OP explicitly excluded it.

Okay, but MV is still a price (of a sale ) between a willing buyer and a willing seller.

So if a concept, idea, or contribution attributed to X can not be sold, then "it" can not have a market value.

 

[Deleted member 142783]

How is this not as simple as land value minus market value of the entire property= improvement value