CHAPTER 2

Valuation Fundamentals

Valuation in Plain English

“I don’t want to pay that much for a valuation,” the caller said. “Can’t you just put my numbers into the computer and spit out my value? I just want ­something quick and dirty.” This is an all-too-common conversation that I have with potential clients. The truth is, there’s no such thing as a quick valuation, and there’s no (reputable) computer program that can provide an accurate valuation based on a bunch of numbers you input.

In this chapter, I will explain the entire valuation process by using everyday language. So if you are a valuation professional, please forgive me for not using the specific nomenclature that you are used to.

Let’s look at a real-life example that shows why ...

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