Market Appraisal - L2 Flashcards
When does a valuation not have to be in line with the Redbook?
Negotiating purposes
Agency and Brokerage purposes
Others include expert witness and legal services, however these would not be merely a MA
How do the Property Ombudsman Codes of Practice for letting and estate agents relate to Market Appraisals?
Advise must be in the consumers best interests
The benefits and disadvantages of a recommended method of letting and managing the property should be explained in clear terms
The figures advised must be done so in good faith and in line with market conditions. Never misrepresent value to gain or retain instruction.
Values should be supported by comparables
Advise the landlord of the legal requirements of letting a property (EPC, EICR, smoke and carbon monoxide alarms)
Advise of any repairs that need doing before letting
Advise on any tax deduction from rental income if the landlord is over-seas
Advise on obtaining a third party inventory
What is the difference between an assumption and a special assumption?
A special assumption is something that differs from the actual facts (is untrue at the time of valuation), where an assumption is something that is likely to be true, but does not need further investigation
What factors affect MV?
Character, age, condition, location, size, construction, ownership structure, planning permissions, PRoW etc
What factors affect MR?
Character, age, condition, location, size, lease terms, use class / planning permission, business rates etc
What is an institutional client?
Any educational, religious or social organisation (school, hospital, church etc)
If the farm buildings held development value, did you still value on the basis of MV?
Yes, in conjunction with hope value (an element of market value in excess of the existing use value, reflecting the prospect of some more valuable future use).
Used comparables to establish this.
How did you value the CV of the barn that was let on an FRI lease?
I used both the comparable method and term and reversion to establish CV.
What did you include in your Terms of Engagement prior to a market appraisal?
Usual things like client, property, fee etc, but also limitation of liability and authorised use.
Why did would the pasture and woodland attract a higher value if sold to neighbouring properties?
Neighbours are usually deemed as special purchasers (a particular asset has a special value because of advantages arising from its ownership that would not be available to others on the market).
Also, may hold marriage value (an additional element of value created by the combination of two or more assets or interests where the combined value is more than the sum of the separate values)
