Valuation Flashcards
What is a special assumption
An assumption that is untrue at the time of valuation
What are the 5 RICS recognized methods of valuation
1) Comparable
2) Investment
3) Residual
4) Profits
5) Depreciated Replacement Cost
What date was the latest red book global standards introduced
January 2022
What date was the latest red book uk supplement introduced
November 2018
Definition of Market Value
The estimated amount for which an asset or liability should exchange on
the valuation date between a willing buyer and a willing seller in an arm’s
length transaction, after proper marketing and where the parties had
each acted knowledgeably, prudently and without compulsion
What is special value
An amount that reflects particular attributes of an asset that are only of
value to a special purchaser
What is 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
RICS Red Book Professional Standards
PS1 = Compliance with standards where a written valuation is provided.
PS2 = Ethics, competency, objectivity and disclosures
RICS Red Book Valuation Technical and Performance Standards
VPS1 = Terms of engagement
VPS2 = Inspections, investigations and records
VPS3 = Valuation reports
VPS4 = Bases of value, assumptions and special assumptions
VPS5 = Valuation approaches and methods
What is an assumption?
Where it is reasonable for the valuer to accept that something is true without the need for specific investigation or verification.
What is a Building reinstatement valuation?
The sum a building should be insured for in the event that a significant issue occurs, such as fire, where by a building will need to be reconstructed
