Valuation Flashcards

Question

What Stipulations might a secured lending request specifically?

Answer 1

For the a secured lending valuation, lenders have varying types of valuation instruction letters which se equally varied requirements Such as: Reinstatement value of the buildings for insurance purposes. Suitability as security within specific marketing peroid - eg 6 months for a secured lending valuation at East Allington Farm Commentary on the rental value

Answer 2

Instructions were received to provide a red book valuation for divorce proceedings by one of the parties. Adhered to RICS Conflicts of interest Professional Statement (Pub. March 2017 reissued July 2023) I confirmed the clients identity, their interest in the property & any involvement with any other relevant parties. Sent CoI email to all Rendells offices -asking if there was any reason why we should not undertake the valuation instruction - specifying a date for response I prepared the ToB in accordance with VPS 1 stating amongst other things: Purpose of the valuation Basis of value Scope of work Assumptions Valuers qualifications/expertise independence & objectivity Fees & payment Liability & duty of care CHP

Answer 3

Agreed access I began with ensuring I was aware of my surroundings & any unexpected hazards Inspected the external areas noting access, what the areas were comprised, boundaries, parking etc. Evaluating any unusual factors which may affect value ie. the presence of Japanese Knotweed. Making note of the external elements of the buildings materials, condition etc. I then moved inside the building beginning in entrance hall & working through all ground floor rooms before moving to the first floor. Noting the features in each room and measuring the effective floor area of each room as per RICS Code of Measuring Practice 6th Edn. I noted the services

Answer 4

Critical component of property valuation & it is considered to be good practice Pt 4 VPS 4 Sets out the standards for such inspections To assess the property's condition, identify any potential issues and evaluate local factors which may significantly affect the properties values & which cannot be accurately assessed without the valuer being present. In order to sufficiently describe & explain the valuation & valuers opinion documentation must be maintained throughout the process, photographs/legible notes maintain an audit trail. Photos should be appropriate & used as required

Answer 5

I have collated the following: Land Registry Title Register & Plan/s Flood risk information Radon Gas information/plans NVZ Information Any relevant planning applications/history Scale Plans of the property to be valued Site Identification plans (NTS) Photographs Any professional reports pertaining to the property The reason for collating this information for the appendices in a Reb Book Valuation is to support the commentary in the main report providing essential background info, transparency & evidence that justifies the valuation.

Answer 6

A valuation of a property subject for divorce proceedings. Established the purpose of the valuation Obtained details of the property - such as address, type, tenure. Verified identity of the client. Undertook CoI Check Established suitable knowledge & skill of valuer - In accordance with RICS Valuation Global Standards Prepared ToB in accordance with VPS1 of RICS Valuation Global Standards and obtained a signed copy for the file I conducted desk top research Arranged access and conducted a site inspection in accordance with Pt. 4 VPS4 I carried out market research to find suitable comparable evidence, evaluated & verified these. Analysing these. Arrived at my valuation figure which was discussed with the supervising registered valuer. The report was reviewed and issued to the client and the clients solicitor.

Answer 7

HOWN HOUSE! Large 5 bedroom Victorian Property (Date Stone 1880) 3 stories Set in extensive gardens Accessed via private driveway Various outbuildings inc. Garage with studio above Field Shelter & stable building Open fronted storage building Range of agricultural buildings 33.42 acres of ring fenced permanent pasture & woodland. Date of Death 17th December 2023 OMV - £1,650,000 Agricultural Value £1,155,000 (30% considering antrobus case)

Answer 8

Being an IHT Valuation the property had to be valued at the Date of Death being 17th December 2023 & not current market value. (s1160 of IHT Act 84) Property was difficult to find comparables for due to varying range of buildings condition etc. I sourced comparables from our own comparable list, and searching other agents websites & auction websites verifying these by speaking to the agents. I sourced comps for land and land and buildings from other agents, auction websites & our own comparable list

Answer 9

Adjustments were made for size, location & condition The comparable evidence was not an exact match for the property and therefore adjustments were required to allow for the differences in the various factors which would affect the value.

Answer 10

The Market value is provided in accordance with s160 if the IHT Act 1984 - prices the property might reasonably be expected to fetch id sold on the open market at the time - with no restriction By virtue of that same Act s.116 the value attributable to the agricultural value - (assuming it was subject to restriction for ag use only) will benefit from 100% - this property was owner occupied from pre 10th March 1981 Therefore IHT is only payable on the difference between OMV at DoD & the ag value

Answer 11

I presented my valuation figures explaining my rationale & calculations for arriving at these figures. The RV considered my rationale and calculations reviewing my notes & chosen comparables and was in agreement. The valuation report was sent to aonther senior valuer within the firm for review and then signed by the RV who was idenfied on the ToB

Answer 12

The bank were aware of the conflict of interest as they referenced this in their initial email outlining the instruction It was detailed in the ToB signed by the client. However if they had not been aware I would have ensured informed consent was received from the Bank (our client) - as detailed in the RICS Professional Standard Conflicts of Interest Professional Statement

Answer 13

I reinstatement costs were calculated using the CAAV Building Cost Schedule

Answer 14

Comparable valuation. The property was jointly owned in equal undivided shares by the deceased and her sister. The deceased was in occupation of the property at the date of death with the sister's principal residence being in Scotland. After collecting, analysing & adjusting the appropriate comparable evidence, the value of the property was ascertained. The total value of the property was then halved to establish the value of the deceased share & then 10% was deducted from this figure for IHT purposes. As provided for by the VAO's Inheritance Tax Manual for a half share without rights of occupation as main residence a half share should be valued by taking the full value of the property and deducting 10% from the deceased share. This reflects the challenges associated with marketability and the potential difficulties in selling a half share especially of the surviving owner is not in occupation

Answer 15

I would politely decline the instruction. Be open & honest with the client and tell them that I don't have the requisite knowledge or expertise in this type of specialist property necessary to carryout the valuation. I would refer them to a senior valuer within the firm to discuss the instruction.