Valuation Flashcards
What are the 5 methods of valuation
- Comparable
- Investment (cap rate etc. yield based)
- Profits (eg. petrol station, pub)
- Deprciated replacement cost or Contractors valuation (Oil refinery, Brewery, bus depot)
- Residual valuation (develpoers method)
What is the RICS Valuation Standards (Red Book)?
The RICS Valuation Standards, commonly known as the Red Book, provides a framework of standards and practices for valuers to follow. It ensures consistency, transparency, and professionalism in valuations.
last updated October 2023
UK supplement is the reference for UK
What is the purpose of the Red Book?
The purpose is to set out mandatory standards and guidance for valuers to follow, ensuring that valuations are conducted with integrity, transparency, and consistency.
What are the key principles of the Red Book?
Key principles include integrity, objectivity, competence, and transparency. These principles ensure valuations are reliable and professionally conducted.
What is the role of the RICS Valuer?
The RICS Valuer must provide
independent,
unbiased, and
professional valuations,
Adhering to the standards outlined in the Red Book, and ensuring compliance with ethical guidelines.
What are the main types of valuations covered by the Red Book?
The Red Book covers various types of valuations including market value, investment value, and fair value, each with specific definitions and requirements.
What does ‘market value’ mean in the Red Book?
Market value is defined as the estimated amount for which a property would exchange on the date of valuation between a willing buyer and a willing seller, both being informed and under no compulsion to act.
What is the importance of the ‘valuation date’ in the Red Book?
The valuation date is crucial as it marks the specific point in time at which the valuation applies. It affects how the value is determined and the assumptions made.
What is the ‘Red Book Global Standards’?
The Red Book Global Standards are international standards that ensure consistency across borders. They are part of the broader RICS Valuation Standards and include global practices and regulations.
How does the Red Book address conflict of interest?
The Red Book requires valuers to identify and manage any conflicts of interest to ensure impartiality and objectivity in their valuations.
What are the key updates in the latest edition of the Red Book?
Updates typically include revisions to valuation methods, changes in regulatory requirements, and enhancements in guidance to address emerging issues and practices in the valuation profession.
