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RESA E VA UE
1
The resale !alue would depend on the mar'et !alue of the asset which is decided by demand and supply. and most importantly. real estate mar'ets o!er all conditions that might affect the *ar'et price of the asset. =ther factors that mostly affects the price appreciation during post purchase period ,(#>#->(-. among those most important was the gas crisis and new real estate establishment. This made new flats cheaper compared to old ones as most of it didn+t ha!e gas supply. so new buyers during (#>#->( loo'ed for old establishments with this amenity. Thus made our flat to T7 (8.9& million. as per s$uare feet !alue appreciate to T7. ?(&#. RE- ACEMENT VA UE The replacement cost and mar'et !alue of your home are not the same. 1lthough the mar'et prices may rise or fall. building costs only change as the cost and a!ailability of labor and *aterial-6hange. That+s why it is best for buyers to loo' at replacement cost rather than a mar'et price of a flat. 5eplacement cost mostly calculated by considering factors/ "1# Total construction costs depend on the comple4ity of the home+s outside perimeter and roofline@ the more corners. the higher the per-s$uare-foot cost. "$# 5ate home+s $uality class. "%# Aow much someone ha!e to spend on replacing some parts of e$uipment of flat that are a!ailable in localmar'et price. 5eplacement !alue is !ery subBecti!e to calculate because then we ha!e to calculate the replacement cost of all of the stuffs that flat is e$uipped with. ma'es calculation difficult. !AIR VA UE The fair !alue of the e4act same asset at the current mar'et would be around T7. (8.9& *illion or. T7. ?(&#: s$uare feet. also considering the flat+s condition and also the mar'et condition in our calculation. MAR.ET VA UE 3air !alue is the !alue that the buyer is willing to pay and the seller is agreed to sell. totally depends upon mar'ets demand and supply condition. and also buyers negotiation abilities. The mar'et !alue of the flat is T7. T7. ?(&#: s$uare feet or T7. (8.9& *illion as a whole. O--ORTUNIT/ COST The foregone consumption of the in!estment made bac' in (##? is hard to determine. But if we consider the fact that the prices too' a huge hi'e in the recent years in the real estate industry. our in!estment in the car has been !ery lucrati!e and efficient one. considering the fact that after all the use that we ha!e made out of the flat. now we can sell it at e!en a higher price. or appreciated price. 2o opportunity cost was not high enough to not to go for the purchase bac' then. 2till today it remains lucrati!e.
TRUE VA UE 1s it mentioned earlier in the report about true !alue or intrinsic !alue of flat that. it is the !alue that depends upon the buyer+s perception about its true worth. The true ,intrinsic- !alue of the flat is different from its mar'et !alue. it is actual !alue that a flat wroth to a buyer today. Ce had to calculate this in our pre-purchasing period and the factors that we considered bac' then is mentioned in the !ery first point of the report. It came out to be T7.&(##: 2$uare 3eet. 0OO. VA UE Boo' !alue of the asset indicates the asset+s depreciation. 2o. we assumed that the life time of the flat is >## years@ scrap-!alue of the asset is T'.>&#### then the boo' !alue of the asset is T'.>8> "### at >; annual rate of depreciation. SE ING -RICE
Now gi!en the mar'et price and fair !alue is almost around T7. (8.9& million. 2o. we want to sell it for at or abo!e the mar'et !alue. T1e 2alues 3i44er 4rom one anot1er be)ause o4 some reasons 1. Demand of the mar'et is not always same. B. Drice rises and falls because change in ta4es. duties. polices. price of construction stuffs etc. 6. The gradual decrease in !alue of money. D. 1!ailability of the Aouse Building 0oan is much tough. E. The depreciation of the !alue of the asset because using it o!er time.