When I was young and naive (as opposed to very old and very cynical) I used to be very impressed with valuations - especially if the figure was greater than the one I had paid. These days, I don't even bother to read them.
Forget the following at your peril:
A valuation is an opinion - it is not a divine revelation handed down by God and written on tablets of stone
Their job is to value a property right now - not predict what it may be worth in ten years time (see below)
In my opinion, the value of a commercial building or land is what an intelligent, well informed businessman would pay for it (or sell it for) when he has considered all the alternatives.
In the mid 1970's I was offered a detached stone cottage called Piper Holes in one acre of land on a hillside near Marsden in Yorkshire. It had a stone wall running round it and a nice little stream that ran through the garden. Idyllic. The owner wanted £450 which everybody agreed was expensive - it represented two months of my salary at the time.
Now I had read all the books and so I asked a valuer to give me an opinion. He duly rang me and informed me that he would not charge me as the cottage was only worth £100 (yes, one hundred pounds). Being young and unsure of my judgement, I did not buy it.
A couple of years later the owner was looking for £5,000 and these days he would be looking for £500,000.
Valuers are valuers not prophets.
Bob Cory
Modified on 08/09/2019 at 12:13:39 by ℗ Bob Cory