Cash Equivalent Terms

 

Appraisers take care to consider comparable sales in the sales approach of their appraisal reports that were sold with cash or cash equivalent terms.  Sales with atypical, non-cash terms must be adjusted.

 

Terms are deemed by an appraiser to be cash equivalent if after analysis it appears that the comparable sale was sold with "market" financing (i.e. a typical down payment, typical interest rate and typical payment period was negotiated).  In some markets seller carry backs (purchase money mortgages / land contracts) are typical.  Adjustments must be made for all sales where financing terms are affected by points, below-market interest rates or atypical payment terms.  

 

By definition "market value" means the value of a real property in terms of cash or with cash equivalent terms.  Thus, most appraisers provide appraisal reports to their clients with a standard market value definition with cash / cash equivalent terms specified.         

 

If you would like additional information on how financing terms affect value you can contact us by e-mail at grigdon@cox.net or call us at 1-702-568-6699 with your specific appraisal problem.  we will let you know if we can help you with you appraisal needs.

 


                    



Copyright 2007 Horizon Village Realty & Appraisal

Commercial Real Estate Appraisals in the Las Vegas & Henderson, Nevada Area.