Concepts of Valuation

Question 1

French’s definition of valuation

Answer 1

an estimation of price

Question 2

Millington’s definition of valuation

Answer 2

the art or science, of estimating value for a specific purpose of a particular interest in property at a particular moment in time, taking into account all features of the property and considering all underlying economic factors of the market, including the range of alternative investments

Question 3

price

Answer 3

actual consideration paid

Question 4

worth

Answer 4

a specific investors perception of the capital sum that would be paid/accepted for an income stream

Question 5

value

Answer 5

the money paid by a party willing and able to purchase an article when offered for sale by a willing seller

Question 6

easements

Answer 6

a right given to another person or entity to trespass upon or use land owned by somebody else e.g. accessing utility lines

Question 7

private treaty

Answer 7

agreement for sale at a price negotiated directly between vendor and purchaser

Question 8

auction

Answer 8

public sale in which sold to highest bidder

Question 9

formal tender

Answer 9

fill in form with bid then sent off to vendor

Question 10

informal tender

Answer 10

open-house event where a guide price is given, there is time to exchange contracts but not legally binding

Question 11

offmarket

Answer 11

between 2 parties outside formal market (not listed)

Question 12

valuer as an arbitrator

Answer 12

bound by the arbitration act, to come to a decision purely based on evidence put to them

Question 13

valuer as an expert

Answer 13

use evidence and their own knowledge to value a property forming a better market based decision