Valuation Flashcards
1
Q
Tell me what the 5 methods of valuation are.
A
- Comparable
- Investment
- Residual
- DRC
- Profits
2
Q
Tell me about how you would value a building using the profits/contractors/investment/comparable/residual method of valuation.
A
- Comparable - Comparable evidence is researched and selected on basis of similarity to subjects eg type, size, condition etc. Adjustments are then made to the sales to account for differences and a value is picked
- Investment - The investment method involves assessing market rent and a market based yield. The rent is then capitalised using the yield to establish the capital value.
- Residual - Involves establishing the GDV of a development. Development costs and profit are then deducted to establish the land value.
- DRC - Involves assessing the cost to replace the land and the building with a modern equivalent, including all associated costs and then making appropriate deductions for depreciation and obsolescence.
- Profits - Involves establishing fair maintainable operating profit (FMOP) capable of being generated by a reasonably efficient operator. This is based upon assessment and analysis of fair maintainable turnover. A market based profit multiplier is then used to convert FMT into a capital value.
3
Q
How do you decide which valuation method to apply?
A
It depends on what type of property you are valuing
4
Q
When and why would you use one of these methods?
A
- Comprable method - Used for straight forward properties were there is comparable evidence
- Residual method - used for development properties
- Profits method - used for properties where the major value component of the property is driven by the profitability of the business that occupies the building
- Investment method - used from investment properties that are held for their income stream
- DRC - used where there is no active market for the asset being valued due to the specialist nature of the property
5
Q
What is a years purchase multiplier?
A
Multiplier used to convert income to capital value
6
Q
Give me an example of a good covenant and how this might impact a valuation.
A
- Tesco - lower yield applied
7
Q
What level of PII cover does your firm have?
A
£10,000,000
8
Q
How would you distinguish limitations on liability in your valuations?
A
Liability cap
9
Q
Where in your valuation report do you state any limitations on liability?
A
Terms and conditions
10
Q
What relevance does Hart v Large have on your valuation practice?
A
11
Q
What aspect of Hart v Large allowed the judge to award damages without applying the SAAMCO cap?
A
12
Q
What is the SAAMCO cap?
A
13
Q
Under the SAAMCO cap, is a valuer liable for losses due to a downturn in the market?
A
14
Q
Under the SAAMCO cap, is a valuer’s liability usually limited to the overvaluation on the valuation date?
A
15
Q
What would you do if you received a notice of a PII claim from a client or their solicitor?
A
16
Q
Is there a difference between being negligent when undertaking a survey/valuation and providing negligent advice?
A
17
Q
What is the Red Book?
A
Set of standards published by RICS that contain mandatory rules, best practise guidance and related commentary for all members undertaking valuations of an asset
18
Q
Why does the Red Book exist?
A
Promote and support high standards in valuation delivery worldwide
19
Q
Tell me about a factor which may impact value.
A
Size
20
Q
What is your duty of care as a surveyor when undertaking a valuation?
A
21
Q
To whom do you owe this duty of care?
A
22
Q
Why is independence and objectivity important when valuing?
A
23
Q
Is there a separate UK Red Book?
A
There isn’t a separate UK Red Book. There is an additional UK Supplement that sits alongside the Global Red Book.
24
Q
What is the UK valuation guidance called?
A
RICS Valuation - Global Standards - UK National Supplement
25
Why does the UK guidance exist?
Provides specific information on UK matters
26
When was the Red Book last updated?
Global - 2022
UK - 2019
27
Does this differ from when IVS were last updated?
The IVS were updated in 2022 as well, the Red Book was updated to incorporate these updates
28
What changes were made?
* IVS changes incorporated
* Articulating in more detail the need for clear unambigous and documented terms of engagement when members apply and exceptions to VPS 1-5, under PS1 section 5 exceptions
* More detailed commentary on matters relating to sustainability/resilience and ESG
* Improving and/or clarifying some of the existing Red Book Global text in light of feedback, experience and evolving needs
29
Which do you follow - the latest IVS or the Red Book Global?
The Red Book incorporates IVS, so both
30
Which sections of the Red Book are mandatory and which are advisory?
**Mandatory**
* PS 1 & 2
* VPS 1 - 5
**Advisory**
* VPGAs
31
What does PS1-2/VPS1-5/VPGAs relate to?
**Professional Standards**
* PS 1 - Compliance with standards where a written valuation is provided
* PS 2 - Ethics, competency, objectivity and disclosures
**Valuation Technical & Performance Standards **
* VPS 1 - Terms of engagement (scope of work)
* VPS 2 - Inspections, investigations and records
* VPS 3 - Valuation reports
* VPS 4 - Bases of value,assumptions and special assumptions
* VPS 5 - Valuation approaches and methods
**Valuation Practise Guidance Applications **
* VPGA 2 - Valuation of interests for secured lending
* VPGA 8 - Valuation of real property interests
* VPGA 9 - Identification of portfolios, collections and groups of properties
* VPGA 10 - Matters that may give rise to material valuation uncertainty
32
What type of advice does the Red Book cover?
33
If you provide preliminary advice / draft valuation report, what should you state in writing to your client?
34
What type of valuations might be relied upon by a third party?
35
Tell me what the definition of MR/MV/investment value/fair value?
36
What is the difference between an assumption and a special assumption?
37
What sources of information would you consider when preparing a valuation report?
38
If you have previously valued an asset, do you need to make any additional disclosures and what might they be?
39
If your firm is too small to have a rotation policy or valuation panel, what else can you do to ensure objectivity?
40
When might a conflict of interest exist in relation to a valuation instruction?
41
What must be included in your terms of engagement / valuation report?
42
Where is this covered in the Red Book?
43
What is a restricted valuation service and can you provide one?
44
How do you deal with limitations on inspection or analysis?
45
Can you revalue a property without inspecting?
46
What RICS guidance relates to the use of comparable evidence?
47
What is an internal valuer?
48
Can an external valuer provide an internal purposes valuation?
49
What happens if market conditions change between the valuation date and report date?
50
Is special value from a special purchaser reflected in MV?
51
Where does the definition of fair value come from?
52
Does this differ from MV?
53
When is fair value used?
54
What are the 3 approaches under VPS5?
55
What is the Valuer Registration Scheme?
56
Are there any instances where certain sections of the Red Book may not apply?
57
What are these and which sections don’t apply?
58
What is the basis of value under UK GAAP FRS 102?
59
What is a SORP
60
When would you use EUV?
61
What is the definition of EUV?
62
What additional criteria apply to secured lending valuations?
63
What information should you specifically request for a secured lending valuation?
64
What is a regulated purpose valuation?
65
What additional disclosures must be made for a regulated purpose valuation?
66
What is the basis of value for a statutory valuation?
67
What might a statutory valuation relate to?
68
What is the definition of the statutory basis of valuation?
69
Is this the same for all statutory valuations?
70
What is a yield?
* Used to describe the quality of an investment
* Expressed as a percentage between income receieved from an investment and its capital value
71
What is a Net Initial Yield?
* Type of income yield
* Initial income divided by purchase price
* Reflects purchasers costs
* Common market measure of investment performance
72
What is a reversionary yield?
* Used in term and reversion valuations
* Used to capitalise the reversionary income
73
What is an equated yield?
* Internal rate of return of a growth explicit cash flow
74
What is an equivalent yield?
* Single yield that can be used to capitalise both the term and reversionary incomes
75
How would a yield reported from auction differ from a Net Initial Yield?
76
What purchaser’s costs do you deduct from a valuation?
* Agent fees
* Legal Fees
* LBTT
77
When do you deduct purchaser’s costs from a valuation?
At the end of an investment valuation
78
How would you value a property in uncertain market conditions - does the Red Book give any guidance?
79
How does a term and reversion differ to a DCF?
Term and reversion is growth implicit whereas a DCF is growth explicit
80
What is the difference between a growth explicit and a growth implicit yield?
* Growth implicit - reflects all of the subjects risks and rewards
* Growth explicit -
81
Give an example of a growth implict and explicit yield
* Growth implicit - ARY
82
How would you value an under/over rented investment property?
* Under rented - term & reversion
* Over rented - hardcore/topslice
83
When would you use a dual rate investment calculation?
When the return of capital is calculated at a lower rate than the return on capital
84
Where can you find yield evidence from?
* Databases
* Corporate Publications
* IPF
85
What is the hierarchy of evidence?
* Category A - direct transactional evidence
* Category B - general market data providing guidance rather than a direct indication of value, such as evidence from published sources, commercial databases, indices, historic evidence, demand/supply data
* Category C - other sources, such as transactional evidence from other property types and locations and other relevant background data
86
# ****
What would you do if comparable evidence was limited?
Use the next best thing and make adjustments
87
What is NPV?
Discounted (present) value of a cashflow
88
What is IRR?
Measure of an investment’s profitability over it’s lifetime
89
What is a term and reversion?
* Type of investment valuation used for under rented investments
* Done by capitalising the rent passing until the point at which it reverts back to market rent (next lease event). Reversionary rent is capitalised in perpetuity but deferred from now unitl point it is received. Two values are then added together.
90
What is a hardcore and topslice?
* Type of investment valuation used for over rented investments
* Done by capitalising the contract rent in perpetuity and the top slice (incremental rent), which is the difference between profit rent and market rent, is capitalised in perp but deferred until the next lease event. These two values are then added together.
91
What is a Discounted Cash Flow (DCF)?
Form of growth explicit investment value
92
What is a short-cut DCF?
93
When would you use a DCF?
* Comparable evidence is scarce
* Unusual property
94
What are the advantages of a DCF?
95
What is a YP/PV/YP in perpetuity?
96
What are the disadvantages of a DCF?
97
What is marriage value?
98
When would you include an element of hope value in a valuation?
99
Can you include hope value in a secured lending / mortgage valuation?
100
How would you value a ransom strip?
101
How does market value differ to investment value/fair value?
102
What is a dual capitalisation rate and when would you use one?
103
Is the profits/DRC method used for specialised or specialist property?
104
What type of properties would you use the profits method for?
105
What type of properties would you use the DRC method for?
106
When would you use the profits method?
107
What is intangible goodwill?
108
What is turnover / gross profit / net profit?
109
What are the steps to providing a profits valuation?
110
What is Fair Maintainable Turnover?
111
What is a Reasonably Efficient Operator?
112
Does the assessment of the REO include personal goodwill and trading potential?
113
What is personal goodwill?
114
What is trading potential?
115
How do you calculate the tenant’s proportion of rent in a profits valuation?
116
What is EBITDA?
117
What is Fair Maintainable Operating Profit?
118
How do you calculate the divisible balance?
119
What accounts information would you want to review for a profits valuation?
120
Do RICS provide any guidance on RLVs or valuing development property?
121
What is an RLV?
122
What is a development appraisal?
123
How do they differ?
124
How else can you value development land?
125
What is the basic process of undertaking a RLV/development appraisal?
126
What does a development appraisal show?
127
What are the key things you need to consider when appraising / inspecting a development site?
128
What else should you consider?
129
Tell me about your due diligence when undertaking a development appraisal.
130
What sources of information do you use when undertaking a development appraisal?
131
How can you assess development potential?
132
What is GDV/NDV?
133
How do you calculate GDV?
134
What do development costs include?
135
When do you apply VAT when assessing development costs?
136
Where can you source build costs from?
137
What are typical finance costs?
138
What would you apply finance costs to and on what basis?
139
What is an S curve?
140
What factors influence the decision to use an S curve when applying finance costs?
141
Is there a quick rule of thumb which can be used when applying finance costs?
142
What do holding costs typically include?
143
How do you typically calculate developer’s profit?
144
What are some typical inputs (and %/£) in a RLV?
145
What other criteria might be assessed in terms of performance measurement for a RLV?
146
What are the advantages/disadvantages of a RLV?
147
What is included in the development programme?
148
What is CIL?
149
What is S106?
150
What are the differences between CIL and S106?
151
What is CIL charged on?
152
What is a Monte Carlo simulation?
153
What is a sensitivity analysis?
154
How do you carry out a sensitivity analysis?
155
What variables might you change and why?
156
What factors affect sensitivity of a development appraisal?
157
ell me about your understanding of incorporating affordable housing into development appraisals.
158
Tell me about software you have used to provide a RLV.
159
What RICS guidance relates to the valuation of development property?
160
Give me a limitation of this software.
161
What is viability?
162
When would a cost approach be used?
163
What type of buildings would a cost approach be used for?
164
What is the supposition that a DRC is based upon?
165
What are the 3 components of the cost approach?
166
How do you assess the value of the land?
167
How do you assess Gross Replacement Cost?
168
What costs would you consider within GRC?
169
What would you do if the building could be replaced with a modern equivalent?
170
How would you deal with depreciation/obsolescence?
171
What types of obsolescence are there?
172
What are the three ways to deal with depreciation?
173
Is the cost approach a market valuation?
174
How might onerous lease terms, e.g. restrictive user, break clause, impact upon capital or rental value?
175
What liabilities may be created through valuation?
176
What is a liability cap and when would one be used?
177
Explain why the RICS are carrying out an Independent Valuation Review. Who is leading this?
178
Explain what you understand by the term, margin of error.
179
What caselaw relates to margins of error?
180
Explain your understanding of K/S Lincoln v CBRE Hotels (2010).
181
Explain the precent set in Hyde and another v Nygate and another (2021) in relation to the valuation of high-profile development sites.
182
How can a NIY of zero be achieved?
183
n a scenario where rents are static and the capital value increases, would you expect yields to increase or decrease?
184
What does heterogenous mean in terms of comparable evidence?
185
What does the term 'tone of value' mean to you?
186
What does the Court of Appeal decision Scullion v BOS (Trading as Colleys) tell you about a mortgage valuer’s liability?
187
What are current mortgage rates (on a BTL mortgage)?
188
How have they changed over the past few years?
189
What are current LTV ratios?
190
How could you value an HMO using the investment method?
191
What were you specifically looking for in relation to the HMO use?
192
How can you establish if a property is an HMO?
193
What are the minimum rooms sizes for an HMO?
194
What is statutory overcrowding?
195
What legislation relates to this?
196
Tell me about any other legislative requirements relating to HMOs you are aware of.
197
What planning use do HMOs fall into
198
Is there generally a premium attributable to HMO use over and above value as a single family house?
199
Why did you use an investment method of valuation?
200
What is an Article 4 direction?
201
How might gross and net yields differ for HMOs?
202
What RICS guidance are you aware of relating to HMO valuation?
203
Was there any UK-specific guidance you also complied with?
204
What category of buy-to-let valuation does a HMO fall within?
205
What are some of the broader issues facing the HMO sector?
206
Tell me about the regulation of the HMO sector.
207
How can rental incentives impact on HMO valuation?
208
What are guaranteed rents / cash backs in lieu of rental income and how can these impact upon value?
209
ow can Market Rent impact upon the underwriting of a loan?
210
How have you commended upon any limitations to accuracy of your HMO valuations?
211
How can maintenance costs impact upon valuation and what does the Red Book say about these for HMOs?
212
When is it reasonable to adopt the income approach when valuing HMOs under the Red Book?
213
What additional considerations do you need to make for category 3 scenarios?
214
What is a lifetime mortgage/home reversion/sale and rent back/home purchase plan?
215
hat are the Red Book requirements in relation to these?
216
What is shared ownership/shared equity scheme?
217
How would you value a shared ownership / shared equity scheme property?
218
What is a trustee mortgage valuation?
219
What legislation relates to this?
220
What is affordable/market rent?
221
hat is your role in relation to advising a lender client?
222
What liability do you have to the borrower when advising a lender client?
223
Does this vary depending on whether the valuation is disclosed by the mortgagee?
224
ell me about the requirements in relation to your terms of engagement / inspection.
225
What is the basis of value?
226
What factors may have a material impact on value?
227
What assumptions / special assumptions have you made in relation to this?
228
What is reinstatement cost and when would you be asked to provide it?
229
How would you calculate it?
230
How would you deal with suspected hidden defects?
231
How would you treat incentives?
232
Tell me about the application of the RICS Residential Mortgage Specification in relation to a specific purpose, e.g., re-inspection or valuation without internal inspection.
233
Where would you find the RICS Residential Mortgage Specification?
234
What are the 3 categories of BTL investments?
235
Have you valued a historic building?
236
What RICS guidance were you aware of
237
Can you tell me a key principle of this guidance?
238
How do you reflect the historic nature of a building in your valuation advice?
239
hat type of RICS surveys include a valuation?
240
What level of valuation advice does a Level 2 Home Survey include?
241
What guidance does the RICS provide in relation to this?
242
What is the basis of valuation in this type of report?
243
What assumptions are made in this type of report?
244
What else do you need to include in relation to your valuation?
245
Tell me about the RICS guidance relating to the valuation of individual new-build homes.
246
What is the new build premium?
247
How would a valuation of new build home differ to a second hand home?
248
Tell me about how you have applied this guidance to a new build valuation.
249
What is a key principle of this document?
250
Tell me about your use and understanding of AVMs.
251
Does the RICS provide any guidance on this?
252
What is an AVM?
253
What is an advantage and a disadvantage of using an AVM?
254
ive me an example of an AVM you have used.
255
ve you valued a residential property purpose built for renting?
256
What RICS guidance are you aware of in relation to this?
257
What are the key principles?
258
What are the three key pieces of legislation which have impacted the UK residential market (and purpose built valuation)?
259
What valuation considerations would you take into account when valuing a purpose built for renting property?
260
What is the difference between a gross and net yield in this respect?
261
What factors influence yields?
262
What residential operating expenses would you need to take into account?
263
What is Net Operating Income?
264
How would you calculate it?
265
Have you valued a BTL / HMO property?
266
What RICS guidance are you aware of in relation to this?
267
When was it last updated and what changes were made?
268
What are the key principles?
269
How might the release of a large number of new build properties impact the local market?
270
Can ‘hope value’ be considered in valuations falling under UK Appendix 10?
271
If Market Value is assessed prior to or during construction, should the valuation reflect the evidence and market at the date of valuation or an assumed completion date?
272
Is there a set discount for a new build premium?
273
What do RICS say about sales incentives?
274
Should you reflect sales incentives in your valuation?
275
Where would you find details of incentives?
276
When and why would you review a UK Finance Disclosure of Incentives Form?
277
hat are some of the ways that a home can be offered at a reduced price?
278
or houses with restrictions on occupancy, e.g., by income or job type, what is a typical discount used in the market?
279
What is a new build warranty?
280
How long would a typical warranty last for?
281
If a property was built in the last 10 years and does not have a professional certificate or guarantee/warranty, would this affect value?
282
What are the two special assumptions relating to Projected Market Value (PMV) and when would you adopt PMV?
283
What are some of the types of home finance product?
284
Who further regulates valuations for home finance products?
285
# 1.
What are the key differences between a lifetime mortgage and a conventional mortgage?
286
Would the amount of mortgage debt to be redeemed at the end of a lifetime mortgage term be less or more than that of a conventional mortgage?
287
What is home reversion?
288
What is sale and rent back?
289
What is a home purchase plan?
290
What are the bases of value for a registered social landlord’s housing stock for secured lending purposes?
291
What is a statutory valuation?
292
Who is responsible for Council Tax valuations?
293
What Council Tax bands exist in England?
294
What is the basis of value for Council Tax valuations?
295
What assumptions are made in a Council Tax valuation?
296
What is the Right to Buy?
297
What legislation relates to Right to Buy?
298
When might a lender instruct a drive-by valuation?
299
What is the impact of the Rentcharges Act 1977?
300
Until 22 August 2037, how should rentcharges be dealt with?
301
Within what general distance of a dwelling might Japanese Knotweed have a material impact on value?
302
How could a mortgagee seeking remedy from a defaulting borrower serve a valid notice?
303
Explain what you understand in relation to the issue of 'down valuation'.
304
What does the legal case of Ryb v Conways (2019) say about the valuation of property affected by Japanese Knotweed?
305
What valuation approach does the RICS recommend is taken when valuing property is affected by Japanese Knotweed?
306
What guidance sets this approach out?
307
What is the House Price Index and how would you use it when valuing a residential property?
308
What are some of the key drivers of demand for housing?
309
How would you assess and report on condition in an investment valuation?
310
How could a S106 agreement affect the valuation of a new build home?
311
How would you analyse a part-exchange comparable?
312
What is a neighbourhood in terms of residential valuation and why do you need to understand this concept?
313
When analysing comparable evidence, how would you apply the concept of adjusted value?
314
What residential design features do you consider add value in your locality?
315
Tell me why terms of engagement are important.
316
What checks do you undertake before accepting a valuation instruction?
317
How do you ensure you know who your client is when undertaking a valuation instruction?
318
Are there any additional requirements when undertaking a valuation in which the public has an interest or third parties may rely?
319
Are there any additional requirements for loan security valuations?
320
Talk me through an example of when you have agreed terms of engagement with a client.
321
What are the key elements included within terms of engagement?
322
What does the Red Book say about terms of engagement?
323
What does the Red Book say about inspections?
324
What does the Red Book say about reporting requirements?
325
What are the differences between a desktop and a full valuation report?
326
Tell me about how you ensure that information relied upon in your valuation is appropriate and reliable?
327
Tell me about your valuation at Cove?
328
How did you select and analyse the comparables?
329
At Hayfield Crescent, how did you source comparables for the non- traditional property? Was this difficult if there is a marketability issue?
330
At South Anderson Drive, how did you find comparables relating to the proposed extended house? Talk me through your selection, analysis and conclusion?
331
ave you used any other methods of valuation?
332
At Mayfield Gardens, how did you advise the lender client with relation to the proposed works? How was this evidenced?
333
AT the development opportunity in Newmachar, talk me thought how the client took on board the provided advice?
334
Did the two methods of valuation support?
335
At the new build home in Bucksburn, discuss why the property was valued as second hand and how this impacted your reasoned advice?
336
How would you usually carry out a new build valuation?
337
How would you analyse the comparables and advise the client of MV?
338
Can you talk me through your level 2 examples?
## Footnote
Summary of Experience
* Home Report in Cove - Captured various details during inspection such as floor area, accommodation, level of finish and condition. Used online database to find comparables for property, conducted analysis and reached a value.
* Home Report in Hayfield Crescent - property was a 'Tee-Beam'. Property was formally defective and still faces heavily restricted lending. Purchaser was most likely going to have to be a cash purchaser and this would need to be reflected in value. When searching for comparables I ensured I selected properties of similar construction and branched out to other PRC properties such as Whitson Fairhurts.
* Valuation on South Anderson Drive - client was looking to extend and renovate property and wanted to know value on completion of works. Client provided me with various pieces of data such as plans and specifications. When searching for comparables I looked for ones that reflected the properties increased floor area and level of finish.
339
What are your level 3 examples?
## Footnote
Summary of Experience
* MVR in Mayfield Gardens - Valuation was for short term finance and applicant was planning to carry out works to property. Lender provided me with scope of works and asked for current market value and market value on completion of works. Also requested we comment on works provided. Advised the lender that the works did allow for a slight uplift in value, they didnt allow for a massive uplift in value.
* Development Valuation in Newmachar - Valuation of a development oppurtunity as client was looking to sell it. Site had planning permission to convert agricultural shed into two semi detached dwellings. Conducted a residual valuation and then used a comparable valuation at end to cross check residual value.
* MVR in Bucksburn - Valuation of new build property. Lender requested that we value property as second hand which differs from other lenders that request value as new. As purchase price was for property as new, the value as second hand was lower. I advised the lender that the value reflected the property if it was sold on the second hand market and was therefore lower than the purchase price. Advised the lender than if the value was to be as new-build, it would likely be higher than second hand.
340
When would each method of valuation be employed?
## Footnote
Valuation - Level 1
* Comprable method - Used for straight forward properties were there is comparable evidence
* Residual method - used for development properties
* Profits method - used for properties where the major value component of the property is driven by the profitability of the business that occupies the building
* Investment method - used from investment properties that are held for their income stream
* DRC - used where there is no active market for the asset being valued due to the specialist nature of the property
341
Can you tell me the basics of each method of valuation
## Footnote
Valuation - Level 1
* Comprable method - involves gathering sales of similar properties that have similar characteristics to the one being valued. You then carry out an analysis of the comparables and make adjustments to reflect differences.
* Residual method - Involves establishing the GDV of a development. Development costs are then deducted to establish the land value.
* Profits method - Involves establishing fair maintainable operating profit (FMOP) capable of being generated by a reasonably efficient operator. This is based upon assessment and analysis of fair maintainable turnover. A market based profit multiplier is then used to convert FMT into a capital value.
* Investment method - The investment method involves assessing market rent and a market based yield. The rent is then capitalised using the yield to establish the capital value.
* There are two traditional methods used that vary depending on if the property is under or over rented. For over rented properties, a hardcore and topslice is applied. For under rented a term and reversion is used.
* DRC - Involves establishing the cost of land, build costs to replace the asset with a modern equivalent and then making an allowance for deterioation and obscelence
342
What are some reasons for a valuation to be required?
## Footnote
Valuation - Level 1
* Pre-sale
* Marketed sale
* Loan security
* Taxation
* Seperation
* Financial planning
343
What is the most recent version of the Red Book and its UK counterpart?
## Footnote
Valuation - Level 1
* Global - 31 January 2022
* UK - 14 January 2019
344
What parts of the Red Book are mandatory?
## Footnote
Valuation - Level 1
* PS 1-2
* VPS 1 - 5
345
Can you tell me the parts of the Red Book that apply to your area of practise?
## Footnote
Valuation - Level 1
**Global**
* VPGA 2 - Valuation of interests for secured lending
* VPGA 8 - Valuation of real property interests
* VPGA 9 - Identification of portfolios, collections and groups of properties
* VPGA 10 - Matters that may give rise to material valuation uncertainty
**UK**
* UK VPGA 10 - commercial secured lending
* UK VPGA 11 - valuation for residential mortgage purposes
* UK VPGA 12 - valuation of residential property for miscallaneous purposes
* UK VPGA 13 - residential secured lending guifance for other related purposes including RICS HomeBuyer Services
* UK VPGA 15 - valuations for CGT, IHT, SDLT & ATED
346
What is the most recent version of the Comparable Evidence guidance?
## Footnote
Valuation - Level 1
347
What are some key principles of the Comparable Evidence guidance?
## Footnote
Valuation - Level 1
348
What are the bases of value listed in the Red Book?
## Footnote
Valuation - Level 1
* Market Value
* Market Rent
* Investment value (worth)
* Fair value
349
What is Market Rent?
## Footnote
Valuation - Level 1
Market Rent is the estimated amount for which an interest in real property should be leased on the valuation date between a willing lessor and willing lesee on appropriate lease terms in an arm's length transaction, after proper marketing and where the parties had each acted knowledgeable, prudently and without compulsion
350
What is Market Value?
## Footnote
Valuation - Level 1
Market Value is the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and willing seller in an arm's length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion
351
Why are councils externally insulating non-trads?
## Footnote
Inspection - Level 2
* Poor thermal efficiency
352
How would you handle clients money?
## Footnote
Ethics, Rules of Conduct & Professionalism - Level 1
353
Is there a maximum amount of cash you can accept?
## Footnote
Ethics, Rules of Conduct & Professionalism - Level 1
354
Tell me about your valuation at Cove?
## Footnote
Valuation - Level 2
355
How did you select and analyse the comparables?
## Footnote
Valuation - Level 2
356
At Hayfield Crescent, how did you source comparables for the non- traditional property? Was this difficult if there is a marketability issue?
## Footnote
Valuation - Level 2
357
At South Anderson Drive, how did you find comparables relating to the proposed extended house? Talk me through your selection, analysis and conclusion?
## Footnote
Valuation - Level 2
358
Whats a 'Tee-Beam'?
## Footnote
Valuation - Level 2
359
How would you value the 'Tee-Beam' if there were no comparables?
## Footnote
Valuation - Level 2
360
What are the issues associated with 'Tee-Beams'?
## Footnote
Valuation - Level 2
361
Can you give me an example of a Special Assumption?
## Footnote
Valuation - Level 2
362
At Mayfield Gardens, how did you advise the lender client with relation to the proposed works? How was this evidenced?
## Footnote
Valuation - Level 3
363
At the development opportunity in Newmachar, talk me thought how the client took on board the provided advice?
## Footnote
Valuation - Level 3
364
Did the two methods of valuation support?
## Footnote
Valuation - Level 3
365
At the new build home in Bucksburn, discuss why the property was valued as second hand and how this impacted your reasoned advice?
## Footnote
Valuation - Level 3
366
How would you usually carry out a new build valuation?
## Footnote
Valuation - Level 3
367
For the development in Newmachar, how did you get your build costs, developers profit etc?
## Footnote
Valuation - Level 3
368
What RICS guidance relates to the valuation of new builds?
## Footnote
Valuation - Level 3
369
What are some key principles from the new build guidance?
## Footnote
Valuation - Level 3
370
What would you do if the Special Assumption a client asks you to provide isn't realistic?
371
How would you determine construction costs?
372
What are the deficiencies of residual valuations?
373
What are the sources of funding? And cost?
374
How much developers profit? What are the options for estimating this?
375
What is difference between development appraisal and residual valuation?
376
You state a value after repairs at £90,000 but the quotations for repairs total £15,000 which is £5,000 more than expected. Would you adjust value?
377
If you were asked to value a repossessed property what might you be asked for? (Projected Market Value)
378
What is hope value? How would you quantify it? When would you report it or not report it?
379
How would you report the value a property with development potential/hope value or planning permission in a Home Report?
380
How would you value a property with cladding/balcony/spray foam insulation/Japanese knotweed?
381
# **
382
383
384
385
386
How do you adjust a valuation for new build incentives?
387
Lender requires a transcript and the comparisons are not suitable, what do you do?
