Loan security valuation Flashcards
How do you comply with VPGA 2 of the Red Book Global?
Due Diligence
Explain what VPGA 2 says about previous or current involvement.
What type of involvement might result in a conflict of interest?
If you were instructed by a party who is not the intended lender, e.g., a prospective borrower or broker, how would you record this in your terms of engagement?
Do you need to enquire whether the subject property has been subject to a recent transaction or provisionally agreed price, if so – why?
What do the terms ‘mark to model’ and ‘mark to market’ mean?
When might you agree a special assumption in a secured lending valuation?
Explain the additional reporting and disclosure requirements set out by VPGA 2.
How would you apply VPGA 2 to a property that is, or will be, owneroccupied / held as an investment / intended to be or the subject of development or refurbishment?
How should you record a lender’s instruction to provide a valuation without internal inspection?
What level of investigations are required by the valuer into legal, planning and environmental matters?
What special assumption might be agreed and why, with the lender client?
Tell me about when you have valued a property subject to a special assumption.
4 villa compound in Abu Dhabi,
3 Villas are occupied by third parties, 1 villa was occupied by the landlord.
Made a special assumption that villa occupied by landlord would be transferred on vacant possession.
Explain your valuation advice on a property’s suitability for secured lending.
Office unit, Business Bay
Property was well maintained, located in a good location, income producing at the valuation date - hence suitable for loan security
What yield did you choose and why?
8.5%
Based on comparable evidence and factors such as rental levels & WAULT
