Valuation

Question 1

What is the definition of Market Value?

Answer 1

Market value is 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 arms length transaction after proper marketing where the parties had each acted knowledgeably, prudently and without compulsion.

Question 2

What is the definition of Market Rent?

Answer 2

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 a willing lessee on appropriate lease terms in an arms length transaction, after proper marketing and where the parties had acted knowledgably, prudently and without compulsion.

Question 3

What are the exceptions to providing a red book valuation?

Answer 3

1. Where a member is providing an agency or brokerage service in compliance with RICS Real Estate Agency and Brokerage PS 2016 and providing advice as part of that service
2. For internal valuations where there is not third party reliance
3. Acting or preparing to act as expert witness
4. Performing statutory functions
5. Providing advice expressly for the purpose of negotiations or litigation

Question 4

What is the definition of investment value?

Answer 4

The value of an asset to a particular owner or prospective owner for individual investment or operational objectives

Question 5

What is the definition of fair value?

Answer 5

The price that would be paid to sell an asset or transfer a liability in an orderly transaction between market participants on the measurement date

Question 6

What would you include in your terms of engagement?

Answer 6

Identification of client
Identification and status of valuer 
Identification of the asset/liability to be valued 
Valuation date
Basis of value
Identification of intended users
Method of valuation to be used
Purpose of the valuation 
Scope of work 
Format of the report 
Etc :)