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Valuation of a property is nothing but the practice of developing the opinion of the value of a real estate property. Usually, the property valuation will be done basing on the market value of that location.
The process of estimating the value of property is known as valuation. Valuation gives useful insight to both the buyers and sellers for estimating the approximate worth of a real estate property. There are many ways to valuate the real estate property and one can also use a combination of the below said methods.
- Sales comparison method
- Discounted value of rentals
- Automated valuations
- Income approach
Market value is an estimated amount for which a real property should trade between a buyer and seller on the date of valuation after proper estimation. Both the parties follow this market value knowledgeably, prudently and without compulsion.
Value in Use
Value in use is the current value of the cash flow or the other benefits that a real estate property generates for the specific owner. Generally a value in use will be less than the market value. When the property owner enjoys some special benefits as agglomeration benefits and the property from the grandfathers then the value in use will be more than the market value. This value is considered as an investment value.
Investment value is the value of a particular real estate property to the particular owner. It is just equal to the market value if the property is under good use, highest and best use. Investment value will be less than market value if the property is not used in such a way that yields maximum at the time of liquidation.
Liquidation value is nothing but the likely value of a real estate when there is no sufficient time to sell the real property in the open market and there by reducing the exposure to potential buyers. Typically, a liquidation value will be lower than fair market value. Liquidation value may be either due to forced liquidation or an orderly liquidation.
Variable Rate Mortgage
Variable rate mortgage is a mortgage loan where the interest rate varies as per the market conditions. Variable rate mortgage is sometime called as floating rate mortgage. The interest rate of such mortgages varies with the base rate of the central banks and reflects the changing costs on the credit markets.
Generally, variable rate mortgages are offered at standard value rate or the base rate.
Vault is an elongated half cylinder (dome or arch) on the roof or ceiling of a house. There are several types of vaults and of all the simplest form of vault is barrel vault. A barrel vault is semi circular in shape. A barrel vault is a continuous semi circular arch and the length being greater than the diameter. Some other types of vaults are:
- Dome vault
- Barrel vault
- Groin vault
- Rib vault
- Fan vault
- Byzantine vault
- Faux vault