Effect of Valuation in Auction Sale – “How can valuation affect auction sales?” we’re frequently asked. Knowing the value of your property before you auction it is very important.
Simply put, valuations may be helpful when it comes to achieving your goals and knowing the value of your property (over its life cycle) is an effective tool you can use. Following that, we’ll explain how valuation can affect auction sales in Nigeria
Below are some of the effects of valuation in an auction sale in Nigeria.
- Valuation serves as a starting point in an auction sale:
Regular valuations of your property serve as a baseline, much like getting an annual physical at the doctor’s office. They show you how worthy your property is and how you can improve on them. However, you can’t tell how well it’s doing unless you know what your baseline is. Consider a valuation to be a blood pressure monitor for your property.
2- Valuations give insight into the property to be auctioned
When done on a regular basis, valuations can give you a decent idea of how your property is doing in comparison to the financial goal you’ve set up for it. Valuations should be used in conjunction with your strategy and referred to as a component of any key decision to be effective during the auctioneering.
3- Valuations might reveal flaws during an auction sale
Key performance indicators (KPIs) will be used in a complete valuation to look at the non-financial characteristics of a property to be auctioned. Corporate structure, client demographics, technology utilization, and company infrastructure are only a few examples. KPIs are helpful in identifying areas where the property could improve–and, in turn, do better when it comes to performance.
4- Valuation affects property management
A valuation can affect the management of a property to be auctioned. The goal of a valuation is to measure the success of your strategic decision-making process and to track performance in terms of the estimated change in value rather than just revenue. This gives one the insight to have a broad understanding of the property and make decisions that affect the bottom line. It also enables you to understand your overall auctioneering business and make the right decisions.
5- Valuation affects accountability
You’ve held yourself accountable for reaching those financial goals and can establish discipline around them now that you’ve used a valuation to discover gaps and chart a course for the future (with measurable goals) regarding the property. Remember, this should be part of your auctioneering strategy because you can only manage what you can measure.
6- Valuations guides auction sales
Knowing your property baseline value can help you to measure it (via KPIs) against similar properties. This will also allow you to know the Unique Selling Point of your property to effectively exercise the auctioneering process and get ahead of your competitors.
7- Valuations provide you with a price perspective
Your property’s historical valuations (remember, valuations should be a continuing effort) provide a starting point for price when it comes to transition. You now have a sense of what your property could be worth to a prospective buyer, whether it’s an external sale or an inside next-generational transfer (though the price is only one component of a deal).
8– Valuations can act as a doorway to capital
Before you can get a lender to give you money for anything, including auctioneering, it’s important for him or her to know exactly how the finance will affect the business on the general outlook. Therefore, the first step in getting funds is to have your property valued.
9- Valuation Can Affect Your Personal Finances
The value of any property often accounts for 50-70 percent of an owner’s personal net worth. Owners frequently fail to diversify their concentrated equity position during auctioneering. Knowing how the value of your business affects your personal finances might help you better plan for the future of your family.
Without a doubt, valuations serve a variety of objectives that extend far beyond “what someone would pay for your business.” Valuations, when used correctly, allow you to peek into the inner workings of your company. As you attempt to enhance and increase the value and overall performance of the business, this information puts you in a competitive position.
Effect of Valuation in Auction Sale