Undertaking a valuation

Question 1

What three things should you consider before undertaking a valuation instruction?

Answer 1

1. Competence - correct level of kills, understanding, knowledge? If not, use Find a Surveyor.
2. Independence - check for conflicts or personal interests.
3. Terms of engagement - set out instructions in writing and receive written confirmation. Confirm competence of valuer.

Question 2

Why do statutory due diligence for valuation?

Answer 2

To check for any material matters which may impact.

Question 3

What due diligence checks should be undertaken?

Answer 3

Asbestos register

Business rates/Council tax

Contamination

Equality Act compliance

Environmental matters

Flooding

Fire safety compliance

H&S compliance

Highways (check adopted roads)

Legal title and tenure

Public rights of way

Planning history and any onerous planning conditions

Conservation area/listed?

Question 4

What is the next step after receiving signed terms of engagement from a client?

Answer 4

Gather information - leases, title documents, planning info, plans and undertake due diligence.

Question 5

What should be done after due diligence?

Answer 5

Inspect and measure

Question 6

After inspection and measuring, what are the next steps?

Answer 6

Research market, assemble, verify and analyse comparables.

Question 7

What should be done after the report is sent to a client?

Answer 7

Issue invoice and ensure valuation file is in good order for archiving.

Question 8

What are the 5 main methods of valuation?

Answer 8

1. Comparable
2. Investment
3. Profits
4. Residual
5. Contractor;s (DRC)

Question 9

What approach converts future cash flows into a capital value (investment, residual and profits methods)?

Answer 9

Income approach

Question 10

What approach makes reference to the cost of the asset (e.g. DRC)?

Answer 10

Cost

Question 11

What is the market approach to valuation?

Answer 11

Uses comparable evidence available.