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Market approach valuation method

Student name Luzdey Beltran group 212032_41 04 of 2020

Furthermore, their understanding allows information to be obtained for other methods.

Topic Description:

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).

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.

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.

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.

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