Market Appraisal Flashcards
What is the purpose of a market appraisal?
Provide an indication of value for the clients property/properties in their given curcumstances.
What are the limitations of a market appraisal?
Based on assumptions as generally part of a pre-sale or pre-build appraisal. Value can be different at the time of a ‘formal’ valuation being issues.
Data limitations
Indicative
Subject to valuers judgement and experience
Subject to change at the time of marketing versus the appraisal
Describe the market changes in the last few years.
Started strong off the back of covid-19 with houses selling above HR. Increase in 29% for flats in KDY, increase around 9-14% for Perth urban areas, part of the strongest in the country.
Since increase in interest rates and base rates, though the values haven’t decrease, the offers over HR has. Properties are more likely to sell at or around HR value.
Larger properties are finding it more difficult than smaller properties due to costs of mortgages.
High demand and low supply.
What data sources and methods are used for MA?
Rightmove for sales and comparable evidence.
Sassine / Land Registry records for whole country/regional sales and property information.
RICS wedbsite, research, insights, sector updates
How do you go about a market appraisal?
Comparable evidence for valuation
Consider target market
Appropriate selling period
Selling method
What legislation / RICS guidance is relevant to market appraisals?
Red Book - Global Standards, it is a valuation.
VPS 1-5, still provided with terms, report, valuation and assumptions.
No specific guidance on MAs but there is guidance on portfolios etc.
What are the average prices of property in your area?
Ex local 3 beds - 120-140k
Average small 2 bed flats 60-80k
Detached properties have highest prices and flats the lowest but together take up the majority of the market.
