Omaha daily bee., 1910-02-13
SELBY ON INTRINSIC VALUE
What Constitutes Worth in Real Esr
tate Discussed.
HOW TO ESTIMATE PROPERLY
POints that Must he Given Considera-
tiOn In Fixing Prices-some
Ideas for the Busy
Dealers.

zone of webster's definitions OF in.
trinsic value is the real and true value.
not an apparent or accidental value" said
w. l.. Selby, in addressing the Real Es-
tate exchange Wednesday on What Con.
stitutes and Determines the Intrinsic Value
of Real Estate"
Just as a man Is rich or poor. tall OF
short. or anything is great or small only
by comparison, so in order to more com.
prehensibly apply the term intrinsic
value to real estate. e seems necessary.
and 1t may be interesting to first say
something about values in general. The
most j can hope to do Is to review some
things YOU already know; and to give voice
TO some thoughts of which you have at
some time been possessed.
Regardless of value, It cannot be dis
puted that 1t Is human nature and the
UNIVERSAL rule OF business for a seller to
Try TO get the highes possible price and
Tor the buyer to buy as cheaply as he can.
Fropaoly the most erroneous standard used
10 determine values, and invariably the
Irst argument presented by one side or
the other in negotiating realty sales IS
what others are asking for property in
the vicinity or at what a sale NAV have
VI AAht ItOUtllN. a sale AL n
higher price under circumstances some
times superinduced by an emergency often
Is used as a basis for establishing values.
A like sale at a low price may be equally
erroneous as a basis.
what Is Value.
We all get many requests for opinions on
values of certain houses and lots or of lots
IN certain subdivisions. and often a good
reply Is to treat It Yankee fashion and
answer the question by asking another:
Do you mean the commonly reputed value
or its selling value?
Certain properties may have very little
value. either reputcd or actual, but have
a prospective value, and this cannot he
ignored.
Certain lots, or sand hills. for instance.
may be intrinsically valueless. but have a
speculative value, and such a value Is
real and tangible to some extent, but
cannot be said to be intrinsic in its COM
monty accepted meaning.
while 1t may be regarded that the
asking prices of others is very misleading
for determining real value. probably the
most common mistake of which most own
ers are guilty is that of placing too high
a price on property of doubtful value. with
the hope of fooling somebody, with the re-
suit OF deceiving no one but themselves.
The many factors that enter into the
question Of constituting intrinsic values
are too well known by the experienced
real estate man, and too numerous to be
mentioned here; but singularly enough the
onel that first and most directly and surely
has its effect is in many cases entirely
overlooked by the layman: The. character
Of the neighborhood and surroundings.
Surroundings Considered.
"A dangerous railroad crossing, an ugly
bank, poor streets, the dilapidated home
Of a vicious neighbor. ETC., are features
that are just as certain and definite in
reducing the intrinsic value of all real es-
tate in the immediate neighborhood, as ig-
n%orance, immortality and dishonesty are
sure to deprave a pure mind,
"One permanent family of an objection
able race or class OF people-whether white
or black-in a block will affect the value
Of the property in the whole block; and
three such families may change the entire
neighborhood values by so per cent in a
day. This is not sentiment alone, but
facts in the unfeeling law of business.
An eight room, 5000 dwelling, but in the
wrong location may be worth less than a
Broom cottage. costing $1,000. A man of
means won't buy 1t and a poor man cannot.
1T cannot be denied that every city will
furnish buyers who win pay a bonus for a
home that is assured OF good neighborhood
and this assurance is a security that is
just as intrinsic in value as the ground or
the building itself.
Practically Applied
Primarily, and of itself, one piece of land
is just as valuable as another; a piece of
ground 66x132 at Twenty-fourth and Far
nom is just as valuable as at Sixteenth
and Farnam. The steady and certain con-
centration of more people at the latter cor
ner gives it a much greater value. No
matter what factors contributed to the
cause for this concentration; the fact,
itself, ~tustifles buildings OF such character
and class that this centralizing of people
is made permanent; thus assuring a value
that is real, convertible. tangible, intrinsic.
This same rule applies to residence lots,
and to farm lands of like soil.
I'VE all think that Omaha has passed the
period of doubt or uncertainty as to
whether 1t is to grow into a large city,
and 1t is the certainty of growth of any
city mot alone its size) that is also a
factor in constituting intrinsic values, but
this is only going back to the theory OF
concentration Of people as the great factor
in constituting intrinsic values, which val
ues may be high or low, according TO the
character of the people and improvements
placed on or about the ground.
But property has a worth far beyond
and above such a value in just money
alone. A business property as described
with a steady net income sufficient to en-
able a man to support his family, to edu-
cate his sons and daughters and to help
him carry the burdens that go to make
society better has an intrinsic value that
the mere Spectator is incapable Of ap-
preciating.
The farm that produces the necessities
TO make the living and keep the family in
comfort has an intrinsic value far beyond
its cash value per acre.
The dwelling on a city lot with the or
binary modern convenience for living
adapted to the tastes and financial cir
cumstances OF the owner. IL It provides
for a happy and contented family. has an