How Do You Determine Value?
What is the value of a house?
- It is the amount someone will pay you for it at the time when want to you sell it.
However, value is different to different people
- Seller Price > Valuehouse Otherwise seller would not sell
- Buyer Valuehouse > Price or buyer would not buy.
How do you estimate the value to determine a reasonable price to ask for a house?
- Comparison with similar house sales - COMPS
- Cost Basis - Parametric analysis of cost to build
- Market assessment and previous prices
- Cash Flow Analysis - Value of rental income potential