Market Appraisals

Question 1

What is the difference between Market Appraisals and a Red Book Global Valuation?

Answer 1

“A market appraisal is informal (can be undertaken by anyone).
A valuation is formal (can only be undertaken by a registered valuer).
- An appraisal gives an indication of what the property could achieve in the market based on their assessment of the local market transactions.
- An appraisal is therefore not a valuation and cannot be used for lending/funding purposes.
- Red Book valuations must be undertaken by a qualified person and covered with Professional Indemnity Insurance and a fee would be paid.”

Question 2

What guidence does the RICS provide for estate agents ?

Answer 2

UK Commercial Estate Agency 2016

Question 3

What are the limitations of a market appraisal?

Answer 3

“Not a redbook valuation
No PII cover
Cannot be relied upon for secured lending purposes or financail reporting purposes.”

Question 4

Why are Market Appraisals carried out ? (SUBMISSION)

Answer 4

Give an indication of what their property could sell for and
Assess whether vendors should move or improve or consider selling the property.”

Question 5

When should ToE be given?

Answer 5

Before commencing the works.

Question 6

What is your duty of care as a Real Estate Agent ?

Answer 6

“To work with due skill, care and diligence
Use your best endeavours to achieve the best possible outcome for the client
To not release or misuse any confidential information
Not appoint a sub agent without client permission
Ensure all staff as appropriately trained and supervised
To not accept instruction beyone field of experience.”

Question 7

What is included in a market strategy ?

Answer 7

“Price
Method of sale
Marketing period
Analysis of current market
Approach to marketing
Agreement to client regarding viewings TOB
Arrangements for holding Keys”

Question 8

What do you keep records of when undertaking market appraisals?

Answer 8

“Comps
Inspection and measurements taken
Reasons for adjustments of comps
Must keep for 6 years under the Limitations Act 1980”

Question 9

What must you not deliberately misrepresent in an MA?

Answer 9

The price of the property - comes under the Estate Agent Act 1979.

Question 10

What advice should estate agents provide ?

Answer 10

We should provide realistic and justifiable advice based on our best professional judgement

Question 11

What is paramount in offering market advice for a sale?

Answer 11

“Ensure that is explicitly clear to the client that is an estimate of market price and not a formal red book valuation.
“

Question 12

When reporting advice to the client, what do you do?

Answer 12

Advice in wiritng - always have everything confirmed in writing.

Question 13

What is included within a market appraisal letter ?

Answer 13

“The price
Market strategy
Potential tenants
Fees”

Question 14

What are the pros and cons to online databases such as costar? (SUBMISSION)

Answer 14

Information not always accurate and must be verified.

Question 15

Why did you provide market appraisal advice following sumission of a planning application at west cheltenham? (SUBMISSION)

Answer 15

To provide more up to date advice on value aspirations for their proposed units to inform their strategy for disposal of the land should planning permission to be achieved.

Question 16

What was the conclusion of the market appraisal in Cheltenham?

Answer 16

That dispite sales values not being high in that area compared with town centre Cheltenham - the new build quality and proposed amenities of the scheme would likely yield greater unit prices.

Question 17

What must you state in the terms of engagement before undertaking an MA?

Answer 17

That this is not a rebook valuation.

Question 18

(SUBMISSION residential bristol - Why was this not a red book valuation?

Answer 18

As it did not follow RBG rules and was for disposal purposes and is an exclusion under PS1

Question 19

SUBMISSION (Pembrokeshire) Did you advise on just value?

Answer 19

I advised on the type of purchaser that may be interested in this property.

I advised that I did not believe the property to have development potential as a result of its contentious planning restrictions however, I advised the client to seek further advise from a planner

Question 20

(Pembrokeshire) Who would be the likely purchaser?

Answer 20

Farmers

Question 21

(office bristol) Talk to me how you did your assessment of the local market?

Answer 21

1) Looked at the existing stock within the area on inspection
2) Looked at office values in the area -costar
3) resi values in the area - land reg
4) Looked at the demographic to see the likely target occupier//buyer
5) checked bcis for build cost

Question 22

How easy would this property be to convert to residential ?

Answer 22

I believed it would be fairly easy due to the configuration of the property with a central stairwell and 4 large rooms on both sides.

A similar layout was proven as the nextdoor property which was almost identical had been converted to residential in this way.