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RICS APC > Valuation - lvl 1 > Flashcards

Valuation - lvl 1 Flashcards

1
Q

Tell me what the 5 methods of valuation are.

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2
Q

Tell me about how you would value a building using the profits/contractors/investment/comparable/residual method of valuation.

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3
Q

How do you decide which valuation method to apply?

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4
Q

Valuation methods - when and why would you use these methods?

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5
Q

What is a years purchase multiplier?

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6
Q

Give an example of a good covenant and how this might impact a valuation.

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7
Q

What is PI insurance (PII)?

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8
Q

Why do surveyors need PII?

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9
Q

Tell me about RICS requirements in relation to PII.

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10
Q

What level of PII cover does your firm have?

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11
Q

How would you distinguish limitations on liability in your valuations?

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12
Q

Where in your valuation report do you state any limitations on liability?

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13
Q

What would you do if you received a notice of a PII claim from a client or their solicitor?

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14
Q

Is there a difference between being negligent when undertaking a survey/valuation and providing negligent advice?

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15
Q

What is run off cover?

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16
Q

What is the Red Book?

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17
Q

Why does the Red Book exist?

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18
Q

Tell me about a factor which might affect a value.

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19
Q

What is your duty of care as a surveyor when carrying out a valuation?

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20
Q

To whom do you owe a duty of care?

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21
Q

Why is independence and objectivity important in valuing?

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22
Q

Is there a separate Red Book?

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23
Q

What is the UK valuation guidance called?

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24
Q

Why does UK guidance exist?

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25
Q

When was the Red Book last updated?

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26
Q

Does this differ from when IVS were last updated?

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27
Q

What changes were made?

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28
Q

Which do you follow - the latest IVS or the Red Book Global?

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29
Q

Which sections of the Red Book are mandatory and which are advisory?

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30
Q

What does PS1-2/VPS1-5/VPGAs relate to?

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31
Q

What type of advice does the Red Book cover?

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32
Q

If you provide preliminary advice/draft valuation report, what should you state in writing to your client?

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33
Q

What types of valuation might be relied upon by a third party?

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34
Q

Tell me what the is the definition of market value/market rent/investment value/fair value?

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35
Q

What is the difference between an assumption and a special assumption?

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36
Q

What sources of information would you consider when preparing a valuation report?

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37
Q

If you have previously valued an asset, do you need to make any additional disclosures and what might they be?

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38
Q

If your firm is too small to have a rotation policy or valuation panel, what else can you do to ensure objectivity?

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39
Q

When might a conflict of interest exist in relation to a valuation instruction?

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40
Q

What must be included in your terms of engagement / valuation report?

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41
Q

The terms of engagement / valuation report - where is this covered in the Red Book?

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42
Q

What is a restricted valuation service and can you provide one?

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43
Q

How do you deal with limitations on inspection or analysis?

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44
Q

Can you revalue a property without inspecting?

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45
Q

What RICS guidance related to the use of comparable evidence?

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46
Q

What is an internal valuer?

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47
Q

Can an external valuer provide an internal purposes valuation?

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48
Q

What happens if market conditions change between the valuation date and report date?

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49
Q

Is special value from a special purchaser reflected in in MV?

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50
Q

Where does the definition of fair value come from?

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51
Q

Does this differ from MV?

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52
Q

When is fair value used?

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53
Q

What are the 3 approaches to valuation?

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54
Q

What is the Valuer Registration Scheme?

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55
Q

Are there any instances where certain sections of the Red Book may not apply?

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56
Q

What are instances where certain sections of the Red Book may not apply?

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57
Q

What is a yield?

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58
Q

What is Net Initial Yield?

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59
Q

What is a reversionary yield?

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60
Q

What is an equated yield?

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61
Q

What is an equivalent yield?

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62
Q

How would a yield reported from auction differ from a Net Initial Yield?

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63
Q

What purchaser’s costs do you deduct from a valuation?

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64
Q

When do you deduct purchaser’s costs from a valuation?

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65
Q

How would you value a property in uncertain market conditions - does the Red Book give any guidance?

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66
Q

How could you value a long leasehold interest?

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67
Q

How does a term and reversion differ from a DCF?

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68
Q

What is the difference between a growth explicit and growth implicit yield?

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69
Q

Give examples of each of these types of yield.

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70
Q

How would you value an under/over rated rented investment property?

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71
Q

When would you use a dual rate investment calculation?

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72
Q

Where can you find yield evidence from?

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73
Q

What is the hierarchy of evidence?

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74
Q

What would you do if comparable evidence was limited?

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75
Q

What is NPV?

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76
Q

What is IRR?

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77
Q

What is a term and reversion?

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78
Q

What is a hardcore and topslice?

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79
Q

What is a Discounted Cash Flow (DCF)?

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80
Q

What is a short cut DCF?

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81
Q

When would you use a DCF?

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82
Q

What are the advantages of a DCF?

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83
Q

What are the disadvantages of a DCF?

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84
Q

What is a YP/PV/YP in perpetuity?

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85
Q

What is marriage value?

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86
Q

When would you include an element of hope value in a valuation?

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87
Q

What type of properties would you use the profits method for?

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88
Q

When would you use the profits method?

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89
Q

What are the steps to providing a profits method?

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90
Q

What are the steps to providing a profits method?

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91
Q

What is Fair Maintainable Turnover?

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92
Q

What is a Reasonably Efficient Operator?

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93
Q

How do you calculate the tenant’s proportion of rent in a profit’s calculation?

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94
Q

What is EBITDA?

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95
Q

What is Fair Maintainable Operating Profit?

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96
Q

How do you calculate the divisible balance?

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97
Q

What accounts information would you want to review for a profits valuation?

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98
Q

Do RICS provide any guidance on RLVs or valuing development property?

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99
Q

What is an RLV?

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100
Q

What is a development appraisal?

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101
Q

How does a RLV and development appraisal differ?

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102
Q

How else can you value development land?

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103
Q

What is the basic process of undertaking a RLV/development appraisal?

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104
Q

What does a development appraisal show?

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105
Q

What are the key things you need to consider when appraising / inspecting a development site?

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106
Q

What else should you consider?

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107
Q

Tell me about your due diligence when undertaking a development approasal?

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108
Q

How can you assess development potential?

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109
Q

What is GDV/NDV?

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110
Q

How do you calculate GDV?

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111
Q

What do development costs include?

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112
Q

When do you apply VAT when assessing development costs?

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113
Q

Where can you source build costs from?

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114
Q

What are typical finance costs?

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115
Q

What do holding costs typically include?

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116
Q

How do you typically calculate developer’s profit?

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117
Q

What are some typical inputs (%/£) in a RLV?

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118
Q

What is included in the development programme?

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119
Q

What is CIL?

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120
Q

What is S106?

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121
Q

What are the differences between CIL and S106?

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122
Q

What is CIL charged on?

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123
Q

What RICS guidance relates to development property?

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124
Q

Give me a limitation of this software.

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125
Q

What is viability?

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126
Q

How might onerous lease terms e.g. restrictive user, break clause, impact upon capital or rental value?

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127
Q

What liabilities may be created through valuation?

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128
Q

What is a liability cap and when would one be used?

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129
Q

Explain why the RICS are carrying out an independent review.

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130
Q

Explain what you understand by the term, margin of error.

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131
Q

How can a NIY of zero be achieved?

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132
Q

In a scenario where rents are static and the capital value increases, would you expect yields to increase or decrease?

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133
Q

What does heterogeneous mean in term of comparable evidence?

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134
Q

What does the term ‘tone of value’ mean to you?

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RICS APC (38 decks)

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