G.A. Farrell & Associates Limited CHARTERED VALUATION AND QUANTITY SURVEYORS

Why Value?Valuations, Methods, Importance

Presented by:Mark FarrellG.A. Farrell & Associates Limited

Why Value?The First Question is - The Value of What?Real Estate

Why Value?Several Different Types of ValueSeveral Different Standpointse.g. your Home

Value As Seen By - Yourself

Value As Seen By - Buyer

Value As Seen By - Bank

Value As Seen By - Valuer

Value As Seen By Tax Assessor

Assessed Value

Going-Concern Value

Insurance Value

Liquidation Value, Salvage Value MARKET VALUE

Market Value The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arms-length transaction after proper marketing

Market Value Wherein the parties had each acted knowledgeablyprudently and without compulsion

Valuation MethodologyHow do Valuers arrive at Value?Most Common - Sales Comparison Approach

Sales Comparison Approach

Sales Comparison ApproachOften hear comments like:Market Is InflatedActual Costs Are LessIt Is NOT Real Value

Sales Comparison Approach

Cost Approach

Cost ApproachUsed For Special-Purpose Properties (Brewery, Church, Hospital)In other Words, Properties that do not sell often Replacement Cost less DepreciationIs Building Adequately Insured?Construction costs increasing again

Imperative to check building Insurance

Failure = Financial HardshipAre Buildings Adequately Insured?Sum Insured (S.I.)$1,000,000Current Replacement Cost$1,500,000Damage $600,000Percentage of CRC 40%Insurance Proceeds $400,000

Shortfall $200,000

Income ApproachIncome ApproachWho is a Typical Buyer?An InvestorWhat is Primary Concern? INCOME!

Income ApproachNot Primarily Concerned With -Cost of Building a SubstituteSelling Price of a SubstituteSignificant Differences in Commercial PropertiesRent less ExpensesConvert into Value

Valuation MethodologyImportant Ingredients:Analytical SkillsObjectivity & ImpartialityINFORMATION!

Why Value? What is Importance of Value?Bank In case of DefaultInsurance Company - In case of DamageYou - In case of Purchasing / Selling

Why Value? What is Importance of Value?Investors - In case of Measuring ReturnValues Change Over Time

Price Movements 1973-2013Achieving SuccessResearch shows to achieve Success Need Proper Mentor.Some people choose Intelligent peopleGood-looking peopleSporting or singing stars.

Achieving SuccessChoice affects chances of success! Psychologists have designed several tests and quizzes Contain numbers and personalities Actually shows chances of SuccessAllow me to try on of the quizzes and we will see if it is of benefit to you, ok? Remember however, I am NOT a Psychologist!

Achieving Success:Pick a number from 1-9......... Times this number by 3.........Then add 3............... ......... Then times by 3 again...........You should have a two digit number.... Add these two numbers together.....You then should be left with a single digit number which will tell you who your all time FAVORITE PERSON is....That isGeorge Clooney President ObamaBob Marley Russell Latapy Dwight Yorke

Nelson MandelaJohn Lennon Brian LaraMark Farrell Mighty Sparrow

THANK YOU!

ANY QUESTIONS?