The document discusses the concepts of value, price, and cost as they relate to real estate valuation. It defines value as the worth or utility of a property, which is measured by price under normal market conditions of supply and demand. Cost refers to what is required to build an asset, which may be more or less than the property's value depending on market factors. The document also outlines different types of property values and notes that the appropriate valuation method depends on the purpose and must account for legal and macroeconomic influences.

1. Mr. Sahil Shah
Regional Manager
RE/MAX Mumbai Gujarat Maharashtra

2. RE/MAX Mumbai Gujarat Maharashtra
 Value
 Price
 Cost

3. RE/MAX Mumbai Gujarat Maharashtra
 Value of anything means its worth or utility as
also the qualities inherent in the thing on
which its utility or worth depends.
 Value can be defined as the power of one
commodity to command other commodities
in a transaction which is not vitiated with
fraud, duress or ignorance.
 Value is measured by price.

4. RE/MAX Mumbai Gujarat Maharashtra
 A price is a fact and value is an estimate of
what the price ought to be.
 Value is an estimate of price and pricing
always takes place under conditions of
marketing dependent on the forces of supply
and demand.

5. RE/MAX Mumbai Gujarat Maharashtra
 Cost looks at the matter from the side of
supply.
 Cost is not same as the value. It is a measure of
what it requires to build the asset.
 Cost could be more or less than the value
depending upon the prevailing market
conditions.

6. RE/MAX Mumbai Gujarat Maharashtra
 Value in use
 Value in exchange
 Market value
 Open market value
 Liquidation of forced value
 Potential value
 Special value
 Salvage value
 Replacement value

7. RE/MAX Mumbai Gujarat Maharashtra
 Existing use value
 Highest and best use value
 Rateable value
 Investment value
 Insurable value
 Deprival value
 Book value
 Residual value
 Reversionary value
 Going concern value

8. RE/MAX Mumbai Gujarat Maharashtra
 The value of a property depends on the purpose of
valuation.
 The valuation for the purpose of land acquisition is
not the same as that mortgage. Similarly valuation for
the purpose of insurance is not the same as that for
taxation.
 Since valuation is an essential exercise for assessing
the present value of future benefits, certain macro-
economic indicators like inflation, fiscal and
monetary policies of government, inflow of foreign
money, GDP growth rate of country, etc. influence
value.

9. RE/MAX Mumbai Gujarat Maharashtra
 Valuation is also influenced by the law of the
land.
 Real estate valuation also has to take into
account the legal issues because
development includes value addition to land
and building as well as conformity to legal
provisions in force.

10. RE/MAX Mumbai Gujarat Maharashtra
 Market approach – sales comparison method
 Income approach – capitalization and residual
method
 Cost approach – land and building method

11. RE/MAX Mumbai Gujarat Maharashtra
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