Commencing a valuation instruction

Question 1

What three things should you consider as first steps before undertaking a valuation?

Answer 1

Your professional competence to undertake the valuation

Your independence (No conflict of interest)

Terms of Engagement

Question 2

Describe the timeline to a typical valuation instruction?

Answer 2

Preamble:
- Receive instruction from the client
- Check competence
- Check independence
- Issue terms of engagement (inc. Scope of works, fee, PII, CHP)
- Receive Countersigned terms

Due Diligence
- Gather information – leases, title, planning doc, OS plans etc.
- Undertake statutory due diligence (listed previously)
- Inspect and measure
- Research market / analyse comps

Valuation & Reporting
- Undertake the Valuation
- Draft Report
- Have another Surveyor review your work
- Finalise and sign report
- Report your valuation to the client

Completion
- Issue invoice
- Ensure filing in good order for audit.

Question 3

What are the Three Valuation Approaches and Methods According to International Valuation Standards (IVS) 105

Answer 3

1. The Income Approach (Converting Current and Future Cash flows into Capital Value)
2. The Market Approach (Using Comparable Evidence in the Market)
3. The Cost Approach (Considering value with reference to the Cost of Replacement or Purchase)