L3 Valuation (PE) Flashcards
Why did you value on the assumption of vacant possession? (LV3)
Talk me through your SWOT analysis for the West End example? (LV3)
In the West End example what did you advise your client in relation to loan security? (LV3)
When advising your client regarding the special assumption in West London, what did you consider? (LV3)
You identified the property was reversionary, what implications did this have on your advice to your client at Alperton? (LV3)
What were risk factors within your client in Alperton? How did you make these clear to your client? (LV3)
What yield did you apply in the Alperton example and how did this reflect the market conditions? (LV3)
Why did you conduct due diligence in the Bedford case? (LV2)
Could you talk me through how you adjusted for specification in the Bedford example? (LV2)
Why did you use the term and reversion method in the Bedford example? (LV2)
If the property in Bedford was over rented how would you have proceeded? (LV2)
What did you include in your terms of engagement in East Bedfordshire? (LV2)
What capitalisation rate did you apply in East Bedfordshire, can you explain why? (LV2)
How did you report your opinion to your client in East Bedfordshire? (LV2)
What was the Market Rent in East Bedfordshire? (LV2)
What was the purpose of your valuation in East Bedfordshire? (LV2)
Tell me what the 5 methods of valuation are.
Tell me about how you would value a building using the
profits/contractors/investment/comparable/residual method of valuation.
What is PI Insurance (PII)?
Why do surveyors need PII?
Tell me about the RICS requirements in relation to PII.
How did the decision in Hart v Large affect PII
What aspect of Hart v Large allowed the judge to award damages without applying the SAAMCO cap?
What is the SAAMCO cap?
Under the SAAMCO cap, is a valuer liable for losses due to a downturn in the market?
Under the SAAMCO cap, is a valuer’s liability usually limited to the overvaluation on the
valuation date?
What would you do if you received a notice of a PII claim from a client or their
solicitor?
Is there a difference between being negligent when undertaking a survey/valuation
and providing negligent advice?
What is run off cover?
What is the Red Book?
Why does the Red Book exist?
Tell me about a factor which may impact value
What is your duty of care as a surveyor when undertaking a valuation?
To whom do you owe this duty of care?
Why is independence and objectivity important when valuing?
Is there a separate UK Red Book?
When was the Red Book last updated?
Does this differ from when IVS were last updated?
What changes were made?
Which do you follow - the latest IVS or the Red Book Global?
Which sections of the Red Book are mandatory and which are advisory?
What does PS1-2/VPS1-5/VPGAs relate to?
What type of advice does the Red Book cover?
If you provide preliminary advice / draft valuation report, what should you state in
writing to your client?
What type of valuations might be relied upon by a third party?
Tell me what the definition of MR/MV/investment value/fair value?
What is the difference between an assumption and a special assumption?
What sources of information would you consider when preparing a valuation report?
If you have previously valued an asset, do you need to make any additional disclosures
and what might they be?
If your firm is too small to have a rotation policy or valuation panel, what else can you
do to ensure objectivity?
When might a conflict of interest exist in relation to a valuation instruction?
What must be included in your terms of engagement / valuation report?
Where is this covered in the Red Book?
What is a restricted valuation service and can you provide one?
How do you deal with limitations on inspection or analysis?
Can you revalue a property without inspecting?
What RICS guidance relates to the use of comparable evidence?
What is an internal valuer?
Can an external valuer provide an internal purposes valuation?
What happens if market conditions change between the valuation date and report
date?
Is special value from a special purchaser reflected in MV?
Where does the definition of fair value come from?
Does this differ from MV?
When is fair value used?
What are the 3 approaches under VPS5?
What is the Valuer Registration Scheme?
Are there any instances where certain sections of the Red Book may not apply?
What are these and which sections don’t apply?
What is the basis of value under UK GAAP FRS 102?
What is a SORP?
When would you use EUV?
What is the definition of EUV?
What additional criteria apply to secured lending valuations?
What information should you specifically request for a secured lending valuation?
What is a regulated purpose valuation?
What additional disclosures must be made for a regulated purpose valuation?
What is the basis of value for a statutory valuation?
What might a statutory valuation relate to?
What is the definition of the statutory basis of valuation?
Is this the same for all statutory valuations?
What is a yield?
What is a Net Initial Yield?
What is a reversionary yield?
What is an equated yield?
What is an equivalent yield?
How would a yield reported from auction differ from a Net Initial Yield?
What purchaser’s costs do you deduct from a valuation?
When do you deduct purchaser’s costs from a valuation?
How would you value a property in uncertain market conditions - does the Red Book
give any guidance?
How could you value a long leasehold interest?
How does a term and reversion differ to a DCF?
What is the difference between a growth explicit and a growth implicit yield?
Give examples of each of these types of yield.
How would you value an under/over rented investment property?
When would you use a dual rate investment calculation?
Where can you find yield evidence from?
What is the hierarchy of evidence?
What would you do if comparable evidence was limited?
What is NPV?
What is IRR?
What is a term and reversion?
What is a hardcore and topslice?
What is a Discounted Cash Flow (DCF)?
What is a short-cut DCF?
When would you use a DCF?
What are the advantages of a DCF?
What are the disadvantages of a DCF?
What is a YP/PV/YP in perpetuity?
What is marriage value?
When would you include an element of hope value in a valuation?
Can you include hope value in a secured lending / mortgage valuation?
How would you value a ransom strip?
How does market value differ to investment value/fair value?
What is a dual capitalisation rate and when would you use one?
Is the profits/DRC method used for specialised or specialist property?
What type of properties would you use the profits method for?
What type of properties would you use the DRC method for?
When would you use the profits method?
What is intangible goodwill?
What is turnover / gross profit / net profit?
What are the steps to providing a profits valuation?
What is Fair Maintainable Turnover?
What is a Reasonably Efficient Operator?
Does the assessment of the REO include personal goodwill and trading potential?
What is personal goodwill?
What is trading potential?
How do you calculate the tenant’s proportion of rent in a profits valuation?
What is EBITDA?
What is Fair Maintainable Operating Profit?
How do you calculate the divisible balance?
What accounts information would you want to review for a profits valuation?
Do RICS provide any guidance on RLVs or valuing development property?
What is an RLV?
What is a development appraisal?
How do they differ?
How else can you value development land?
What is the basic process of undertaking a RLV/development appraisal?
What does a development appraisal show?
What are the key things you need to consider when appraising / inspecting a
development site?
What else should you consider?
Tell me about your due diligence when undertaking a development appraisal.
What sources of information do you use when undertaking a development appraisal?
How can you assess development potential?
What is GDV/NDV?
How do you calculate GDV?
What do development costs include?
When do you apply VAT when assessing development costs?
Where can you source build costs from?
What are typical finance costs?
What would you apply finance costs to and on what basis?
What is an S curve?
What factors influence the decision to use an S curve when applying finance costs?
Is there a quick rule of thumb which can be used when applying finance costs?
What do holding costs typically include?
How do you typically calculate developer’s profit?
What are some typical inputs (and %/£) in a RLV?
What other criteria might be assessed in terms of performance measurement for a
RLV?
What are the advantages/disadvantages of a RLV?
What is included in the development programme?
What is CIL?
What is S106?
What are the differences between CIL and S106?
What is CIL charged on?
What is a Monte Carlo simulation?
What is a sensitivity analysis?
How do you carry out a sensitivity analysis?
What variables might you change and why?
What factors affect sensitivity of a development appraisal?
Tell me about your understanding of incorporating affordable housing into development appraisals.
Tell me about software you have used to provide a RLV.
What RICS guidance relates to the valuation of development property?
Give me a limitation of this software.
What is viability?
When would a cost approach be used?
What type of buildings would a cost approach be used for?
What is the supposition that a DRC is based upon?
What are the 3 components of the cost approach?
How do you assess the value of the land?
How do you assess Gross Replacement Cost?
What costs would you consider within GRC?
What would you do if the building could be replaced with a modern equivalent?
How would you deal with depreciation/obsolescence?
What types of obsolescence are there?
What are the three ways to deal with depreciation?
Is the cost approach a market valuation?
How might onerous lease terms, e.g. restrictive user, break clause, impact upon capital or rental value?
What liabilities may be created through valuation?
What is a liability cap and when would one be used?
Explain why the RICS are carrying out an Independent Valuation Review.
Who is leading this?
Explain what you understand by the term, margin of error.
Explain your understanding of K/S Lincoln v CBRE Hotels (2010).
Explain the precent set in Hyde and another v Nygate and another (2021) in relation to the valuation of high-profile development sites.
How can a NIY of zero be achieved?
In a scenario where rents are static and the capital value increases, would you expect yields to increase or decrease?
What does heterogenous mean in terms of comparable evidence?
What does the term ‘tone of value’ mean to you?
