Valuation Level 1 APC Book Flashcards
What is the difference between an Internal Valuer and an External Valuer?
An internal valuer is employed by company to value the assets of the company for internal purposes.
External valuer has no material links with the asset to be valued or the client.
What are the three first steps to first undertake a valuation?
- Competence (SUK)
- Conflicts
- Terms of engagement - including the extent and limitation of the valuer’s inspection
Why do you need to carry out statutory due diligence for valuations?
This is required to check that there are no material matters which could impact upon the valuation.
What statutory due diligence would you understand prior to a valuation?
- Asbestos Register
- Business Rates/Council Tax
- Contamination
- Equality Act 2010 compliance
- Environmental matters (telecom masks, high voltage power lines)
- EPC rating
- Flooding (Envr Agency)
- Planning
- Highways
- Legal Title and tenure
- Health & safety compliance
What is the timeline of valuation instruction?
- Receive instruction from client
- Check competence (SUK)
- Conflicts/Personal interests
- Issues TOE
- Receive signed TOE
- Gather info - leases, planning
- Undertake DD
- Inspect & measure
- Research market, assemble + verify, analyse comps
- Undertake valuation
- Draft report
- Give val + report to another surveyor to check
- Finalise + sign report
- Report to client
- Issue invoice
- Ensure valuation in good order for archiving
What are the 5 main methods of valuation?
PRICC
Profits
Residual
Investment
Comparable
Contractor (Depreciated replacement cost)
What are the three IVS 105 Valuation Approaches and Methods?
The IVS 105 Valuation Approaches and Methods document sets out three valuation approaches: (MIC)
- INCOME (Investment, Residual, profits)
- COST - DRC
- MARKET APPROACH - Comparable
What are the six steps methodology of the comparative method of valuation?
- Select/search comps
- Confirm/verify details and analyse headline rent to get NER as appropriate
- Assemble comps in schedule
- Adjust comps using the Hierarchy of Evidence
- Analyse comps and form opinion of value
- Report value and prepare file notes
What is the RICS document on comparable evidence?
RICS Professional Standard: Comparable Evidence in Real Estate Valuation (2019)
RICS Professional Standard: Comparable Evidence in Real Estate Valuation (2019) - what is the purpose of this document?
This document outlines principles in the use of comparable evidence. It provides advice in dealing with situations where there is limited availability of evidence and sets out a non-prescriptive hierarchy of evidence, noting that “the valuer should use professional judgement to assess the relative importance of evidence on a case-by-case basis”
What are Direct comparables?
- Completed transactions of near identical properties for which full and accurate information is available
- Completed transactions of similar real estate assets
- similar real estate being marketed where offers may have been made but a binding contract has not been completed
- Asking prices (only with careful analysis)
What kind of general market data may you include in your valuation?
- Info from published sources or commercial databases; its relative importance will depend on relevance, authority and verifiability
- Other direct evidence (e.g. indices)
- historic evidence
- demand/supply data for rent, owner occupation or investment
What can be used for comparable when there is a lack of transactional evidence?
Market Sentiment
What is the Contents of the RICS Valuation - Global Standards 2024 (‘Red Book Global)?
Six Parts of the Red Book
Part 1 - Introduction
Part 2 - Glossary
Part 3 - PS - Professional Standards
Part 4 - VPS - Valuation Technical and Performance Standards
Part 5 - VPGA (UK) Valuation Practice Guidance Applications
Part 6 - IVS - International Valuation Standards
Updated December 2024
Effective 2025
