Price, market, cost and value. Sales and trading
The evaluators are careful distinction between the terms of price, market, cost and value.
The term usually refers to the price or selling price of the transaction and apply an exchange, as a fait accompli.
The price represents the “quantity” that a particular buyer agrees to pay and a particular seller agrees to accept the circumstances surrounding the transaction. In general, a transaction reflects circumstances of one or more real estate markets.
The market is a set of arrangements in which sellers and buyers are in contact through a price mechanism.
The real estate market is the interaction between people change property rights against other assets, such as money.
The term cost is used by assessors in relation to production and exchange and can not be achieved cost or cost estimates. The evaluators make a distinction between different types of costs: direct costs, indirect costs, costs of construction and development costs.
Direct costs include costs for labor and material for a building. They include the manufacturer’s direction and profit.
Indirect costs incurred in construction refers to elements other than labor and materials. These include administrative costs, professional fees, financing costs, taxes, insurance, hire.
Construction cost or offer price of the manufacturer, usually includes direct costs (labor and materials) and indirect costs of the manufacturer.
Development cost is the sum of the development costs of housing, including land and bring to a situation of efficient operation. This includes profit promoter or entrepreneur who gives life to the project.
Value can have many meanings in the assessment of property, depending on the context and use. The market value is usually seen as anticipating the benefits to be obtained in the future. Since value exists at a time, then the assessment reflects the value at a certain point in time.
Value at some point, money is an expression of a property, goods or services charged by the sellers and buyers.
To avoid misunderstandings, the assessors will not use the word value alone, but will refer to a certain category (type) value, ie: the market value, investment value, utility value, insurance value and other values.