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    Allen Farber's Avatar
    Allen Farber Posts: 191, Reputation: 1
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    #1

    Nov 2, 2016, 02:36 PM
    property value question?
    so i couldn't tell whether this went under accounting or language, but oh well. Anyway, there was thing I was reading and it didn't make any sense to me. "money was advanced against the value of the property" so looking up the definition of advanced and against, which are "lend money to someone" and "in relation to an amount of money owed or due so as to reduce or cancel it" respectively, it doesn't make any sense to me. So i filled in the sentence with the definitions. So someone lended money to someone to presumably buy property and because the money was lended, it somehow reduced the value of the property. How?
    joypulv's Avatar
    joypulv Posts: 21,591, Reputation: 2941
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    #2

    Nov 2, 2016, 04:19 PM
    What is loan value? definition and meaning - BusinessDictionary.com


    Money was advanced (loaned, usually) against (as collateral) the value (loan value) of the property.
    It may or may not be used more as an exchange, thereby canceling the debt.
    The property value isn't reduced by this.
    Allen Farber's Avatar
    Allen Farber Posts: 191, Reputation: 1
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    #3

    Nov 2, 2016, 04:29 PM
    Quote Originally Posted by joypulv View Post
    What is loan value? definition and meaning - BusinessDictionary.com


    Money was advanced (loaned, usually) against (as collateral) the value (loan value) of the property.
    It may or may not be used more as an exchange, thereby canceling the debt.
    The property value isn't reduced by this.
    Thanks, I appreciate it
    joypulv's Avatar
    joypulv Posts: 21,591, Reputation: 2941
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    #4

    Nov 2, 2016, 06:24 PM
    Thank you too; I finally learned the meaning of 'haircut' from that dictionary. A word I hear on CNBC a lot.
    ma0641's Avatar
    ma0641 Posts: 15,675, Reputation: 1012
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    #5

    Nov 2, 2016, 07:27 PM
    Property value is not changed at all. However, there would most likely be a lien filed against it so net asset value is reduced.
    Allen Farber's Avatar
    Allen Farber Posts: 191, Reputation: 1
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    #6

    Nov 8, 2016, 03:14 PM
    Quote Originally Posted by joypulv View Post
    Thank you too; I finally learned the meaning of 'haircut' from that dictionary. A word I hear on CNBC a lot.
    Also, one more thing, after rereading your answer, what did you mean by "it may or may not be used as an exchange"? Thanks for your time btw.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #7

    Nov 8, 2016, 04:37 PM
    Quote Originally Posted by Allen Farber View Post
    there was thing I was reading and it didn't make any sense to me.
    Does anything make sense to you? Have you never heard the word collateral? Do you not understand its meaning?
    Allen Farber's Avatar
    Allen Farber Posts: 191, Reputation: 1
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    #8

    Nov 8, 2016, 06:10 PM
    Quote Originally Posted by ScottGem View Post
    Does anything make sense to you? Have you never heard the word collateral? Do you not understand its meaning?
    Yeah, collateral, is the thing that you took out the loan to buy, and if you don't pay off the loan, the bank can take possession of it. I just didn't understand what "money was advanced against the value of the property" meant.
    joypulv's Avatar
    joypulv Posts: 21,591, Reputation: 2941
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    #9

    Nov 8, 2016, 07:09 PM
    Money advanced against the value of the property, and I said that maybe an exchange, maybe not.

    You can lend me money against the value of my home. You can end up with my home because I don't pay you back. Maybe I want to start a business and it fails, and we both knew that I'd lose my house to you if that happened. If I do pay you back, no exchange.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #10

    Nov 8, 2016, 08:56 PM
    Quote Originally Posted by Allen Farber View Post
    Yeah, collateral, is the thing that you took out the loan to buy, and if you don't pay off the loan, the bank can take possession of it. I just didn't understand what "money was advanced against the value of the property" meant.
    Wrong as usual. Collateral is the property or assets that is used to secure a loan. It might be the property one is buying if there is enough equity, but it might not be. And that sentence is clear. A lender doesn't normally make a loan for more than the value of a property.
    Allen Farber's Avatar
    Allen Farber Posts: 191, Reputation: 1
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    #11

    Nov 9, 2016, 02:49 PM
    Quote Originally Posted by joypulv View Post
    Money advanced against the value of the property, and I said that maybe an exchange, maybe not.

    You can lend me money against the value of my home. You can end up with my home because I don't pay you back. Maybe I want to start a business and it fails, and we both knew that I'd lose my house to you if that happened. If I do pay you back, no exchange.
    Thanks, I understand it crystal clear now.
    joypulv's Avatar
    joypulv Posts: 21,591, Reputation: 2941
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    #12

    Nov 9, 2016, 06:41 PM
    Allen, want help finding a career that fits you better?
    Maybe you are more of a hands on person. I was just watching an electrician on This Old House say that he was a terrible student. Some very bright people are terrible students.
    Besides, you might be dyslexic, or have a similar inability to sort out sentences and groups of words into something meaningful.
    Allen Farber's Avatar
    Allen Farber Posts: 191, Reputation: 1
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    #13

    Nov 10, 2016, 08:01 AM
    Quote Originally Posted by joypulv View Post
    Allen, want help finding a career that fits you better?
    Maybe you are more of a hands on person. I was just watching an electrician on This Old House say that he was a terrible student. Some very bright people are terrible students.
    Besides, you might be dyslexic, or have a similar inability to sort out sentences and groups of words into something meaningful.
    The thing is even if I don't want to do accounting as a career, it's just something I kind of want to know. Just like math, I don't plan on becoming a mathematician but it's just nice information to know. And I'm not dyslexic, I just tend to overthink things I'm reading.
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