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EHAPC > L3 Valuation (PE) > Flashcards

L3 Valuation (PE) Flashcards

1
Q

Why did you value on the assumption of vacant possession? (LV3)

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2
Q

Talk me through your SWOT analysis for the West End example? (LV3)

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3
Q

In the West End example what did you advise your client in relation to loan security? (LV3)

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4
Q

When advising your client regarding the special assumption in West London, what did you consider? (LV3)

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5
Q

You identified the property was reversionary, what implications did this have on your advice to your client at Alperton? (LV3)

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6
Q

What were risk factors within your client in Alperton? How did you make these clear to your client? (LV3)

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7
Q

What yield did you apply in the Alperton example and how did this reflect the market conditions? (LV3)

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8
Q

Why did you conduct due diligence in the Bedford case? (LV2)

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9
Q

Could you talk me through how you adjusted for specification in the Bedford example? (LV2)

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10
Q

Why did you use the term and reversion method in the Bedford example? (LV2)

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11
Q

If the property in Bedford was over rented how would you have proceeded? (LV2)

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12
Q

What did you include in your terms of engagement in East Bedfordshire? (LV2)

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13
Q

What capitalisation rate did you apply in East Bedfordshire, can you explain why? (LV2)

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14
Q

How did you report your opinion to your client in East Bedfordshire? (LV2)

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15
Q

What was the Market Rent in East Bedfordshire? (LV2)

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16
Q

What was the purpose of your valuation in East Bedfordshire? (LV2)

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17
Q

Tell me what the 5 methods of valuation are.

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18
Q

Tell me about how you would value a building using the
profits/contractors/investment/comparable/residual method of valuation.

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19
Q

What is PI Insurance (PII)?

Why do surveyors need PII?

Tell me about the RICS requirements in relation to PII.

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20
Q

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?

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21
Q

What would you do if you received a notice of a PII claim from a client or their
solicitor?

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22
Q

Is there a difference between being negligent when undertaking a survey/valuation
and providing negligent advice?

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23
Q

What is run off cover?

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24
Q

What is the Red Book?

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25
Q

Why does the Red Book exist?

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26
Q

Tell me about a factor which may impact value

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27
Q

What is your duty of care as a surveyor when undertaking a valuation?

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28
Q

To whom do you owe this duty of care?

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29
Q

Why is independence and objectivity important when valuing?

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30
Q

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?

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31
Q

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?

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32
Q

If you provide preliminary advice / draft valuation report, what should you state in
writing to your client?

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33
Q

What type of valuations might be relied upon by a third party?

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34
Q

Tell me what the definition of MR/MV/investment value/fair value?

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35
Q

What is the difference between an assumption and a special assumption?

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36
Q

What sources of information would you consider when preparing a valuation report?

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37
Q

If you have previously valued an asset, do you need to make any additional disclosures
and what might they be?

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38
Q

If your firm is too small to have a rotation policy or valuation panel, what else can you
do to ensure objectivity?

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39
Q

When might a conflict of interest exist in relation to a valuation instruction?

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40
Q

What must be included in your terms of engagement / valuation report?

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41
Q

Where is this covered in the Red Book?

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42
Q

What is a restricted valuation service and can you provide one?

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43
Q

How do you deal with limitations on inspection or analysis?

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44
Q

Can you revalue a property without inspecting?

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45
Q

What RICS guidance relates to the use of comparable evidence?

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46
Q

What is an internal valuer?

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47
Q

Can an external valuer provide an internal purposes valuation?

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48
Q

What happens if market conditions change between the valuation date and report
date?

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49
Q

Is special value from a special purchaser reflected in MV?

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50
Q

Where does the definition of fair value come from?

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51
Q

Does this differ from MV?

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52
Q

When is fair value used?

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53
Q

What are the 3 approaches under VPS5?

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54
Q

What is the Valuer Registration Scheme?

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55
Q

Are there any instances where certain sections of the Red Book may not apply?

What are these and which sections don’t apply?

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56
Q

What is the basis of value under UK GAAP FRS 102?

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57
Q

What is a SORP?

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58
Q

When would you use EUV?

What is the definition of EUV?
What additional criteria apply to secured lending valuations?

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59
Q

What information should you specifically request for a secured lending valuation?

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60
Q

What is a regulated purpose valuation?

What additional disclosures must be made for a regulated purpose valuation?

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61
Q

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?

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62
Q

What is a yield?

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63
Q

What is a Net Initial Yield?

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64
Q

What is a reversionary yield?

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65
Q

What is an equated yield?

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66
Q

What is an equivalent yield?

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67
Q

How would a yield reported from auction differ from a Net Initial Yield?

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68
Q

What purchaser’s costs do you deduct from a valuation?

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69
Q

When do you deduct purchaser’s costs from a valuation?

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70
Q

How would you value a property in uncertain market conditions - does the Red Book
give any guidance?

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71
Q

How could you value a long leasehold interest?

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72
Q

How does a term and reversion differ to a DCF?

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73
Q

What is the difference between a growth explicit and a growth implicit yield?

Give examples of each of these types of yield.

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74
Q

How would you value an under/over rented investment property?

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75
Q

When would you use a dual rate investment calculation?

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76
Q

Where can you find yield evidence from?

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77
Q

What is the hierarchy of evidence?

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78
Q

What would you do if comparable evidence was limited?

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79
Q

What is NPV?

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80
Q

What is IRR?

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81
Q

What is a term and reversion?

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82
Q

What is a hardcore and topslice?

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83
Q

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?

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84
Q

What is a YP/PV/YP in perpetuity?

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85
Q

What is marriage value?

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86
Q

When would you include an element of hope value in a valuation?

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87
Q

Can you include hope value in a secured lending / mortgage valuation?

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88
Q

How would you value a ransom strip?

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89
Q

How does market value differ to investment value/fair value?

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90
Q

What is a dual capitalisation rate and when would you use one?

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91
Q

Is the profits/DRC method used for specialised or specialist property?

What type of properties would you use the profits method for?

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92
Q

What type of properties would you use the DRC method for?

When would you use the profits method?

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93
Q

What is intangible goodwill?

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94
Q

What is turnover / gross profit / net profit?

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95
Q

What are the steps to providing a profits valuation?

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96
Q

What is Fair Maintainable Turnover?

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97
Q

What is a Reasonably Efficient Operator?

Does the assessment of the REO include personal goodwill and trading potential?

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98
Q

What is personal goodwill?

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99
Q

What is trading potential?

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100
Q

How do you calculate the tenant’s proportion of rent in a profits valuation?

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101
Q

What is EBITDA?

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102
Q

What is Fair Maintainable Operating Profit?

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103
Q

How do you calculate the divisible balance?

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104
Q

What accounts information would you want to review for a profits valuation?

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105
Q

Do RICS provide any guidance on RLVs or valuing development property?

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106
Q

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?

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107
Q

How can you assess development potential?

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108
Q

What is GDV/NDV?

How do you calculate GDV?

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109
Q

What do development costs include?

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110
Q

When do you apply VAT when assessing development costs?

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111
Q

Where can you source build costs from?

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112
Q

What are typical finance costs?

What would you apply finance costs to and on what basis?

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113
Q

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?

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114
Q

What do holding costs typically include?

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115
Q

How do you typically calculate developer’s profit?

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116
Q

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?

A
117
Q

What is CIL?

What is S106?

What are the differences between CIL and S106?

What is CIL charged on?

A
118
Q

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.

A
119
Q

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.

A
120
Q

What is viability?

A
121
Q

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?

A
122
Q

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?

A
123
Q

How would you deal with depreciation/obsolescence?

What types of obsolescence are there?

What are the three ways to deal with depreciation?

A
124
Q

Is the cost approach a market valuation?

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125
Q

How might onerous lease terms, e.g. restrictive user, break clause, impact upon capital or rental value?

A
126
Q

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?

A
127
Q

Explain what you understand by the term, margin of error.

A
128
Q

Explain your understanding of K/S Lincoln v CBRE Hotels (2010).

A
129
Q

Explain the precent set in Hyde and another v Nygate and another (2021) in relation to the valuation of high-profile development sites.

A
130
Q

How can a NIY of zero be achieved?

A
131
Q

In a scenario where rents are static and the capital value increases, would you expect yields to increase or decrease?

A
132
Q

What does heterogenous mean in terms of comparable evidence?

A
133
Q

What does the term ‘tone of value’ mean to you?

A

EHAPC (41 decks)

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