Created on Mon Mar 30 2020 15:37:51 GMT+0000 (Coordinated Universal Time)
Student name Luzdey Beltrangroup 212032_4104 of 2020
Market approach valuation method
The comparative or market approach is mainly based on the Substitution Principle. It is the most direct procedure and is based on statistical data of offers and / or operations carried out, which through its analysis and approval, allows estimating the value of the property under study (Subject).
Furthermore, their understanding allows information to be obtained for other methods.
It should be noted that the data preferably used must correspond to consummate sales, however, in the absence of these, the appraiser may be assisted in the information from offers, which, by means of an additional weighting, allows him to conclude the applicable value.
Example: In the real estate industry, the value of a property can often be estimated by looking at comparables: recent property sales, similar in size and characteristics, located very close to the property being valued.
In the case of companies, the measures investors usually take to value private businesses include contracting recent transactions (sales, mergers), closing operations, industry and economic conditions.