Property Valuation
What is 'value in use' versus 'market value' in real estate appraisal?
ABoth terms are synonymous in modern appraisal practice
BValue in use is the value of the property to a specific user for a specific purpose (which may be above or below market value); market value is the price the property would bring in an open, arms-length market✓ Correct
CMarket value is always higher than value in use
DValue in use applies only to commercial properties; market value to residential
Explanation
Value in use is the value to a specific owner for a specific use — it can differ significantly from market value. Example: a specialized manufacturing facility may have high value in use to the current operator but low market value because few buyers need that specific facility. Appraisers typically estimate market value for lending and sale purposes.
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