Property Valuation
What is 'value in use' versus 'value in exchange' in Nevada real estate?
AThey are identical concepts in Nevada appraisal practice
BValue in use is the worth of a property to a specific user for a specific purpose (may include special-use buildings worth more to the owner than the market); value in exchange (market value) is what a property would sell for in an arm's length transaction on the open market✓ Correct
CValue in use always exceeds value in exchange in Nevada
DValue in exchange applies only to commercial properties in Nevada
Explanation
Value in use is subjective — the worth of a property to its current owner for its current purpose. A manufacturing plant may have high value in use to the company but limited market value (few buyers for specialized facilities). Value in exchange (market value) reflects what the property would sell for in the open market. In Nevada appraisal practice, most assignments seek market value. Special-use properties (churches, hospitals, schools) may have value in use exceeding their market value because alternative buyers are limited.
Related Nevada Property Valuation Questions
- What is an as-is value versus an as-repaired value in Nevada appraisal?
- What is an appraisal management company (AMC) and how does it relate to Nevada mortgage transactions?
- What is a before-and-after appraisal in Nevada condemnation (eminent domain) proceedings?
- What is a narrative appraisal report in Nevada and when is it used?
- Gross Rent Multiplier (GRM) is calculated by dividing the:
- What is the paired sales analysis technique in Nevada residential appraisal?
- What is depreciation in the context of real estate appraisal in Nevada?
- Accrued depreciation in the cost approach includes:
Practice More Nevada Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Nevada Quiz →