Valuation Questions Flashcards
What are the five methods of Valuation?
- Comparable method
- Investment method
- Residual method
- Profit’s method
- Depreciated replacement cost method
What is a loan security valuation?
To establish whether the amount of loan can be secured against the value of a property
What are regulatory valuations?
For taxation, insurance, or financial reporting
Talk me through the valuation of twenty two townhouses at Elephant Park?
- Adopted the comparable method
- Used Molior London and local agents advice to collect sales evidence
- Adjusted comparable evidence in line with the hierarchy of evidence
- Formed my opinion of market value
- Reported to the client
What size are the townhouses?
1,184 - 1,658 sqft
What specification are the townhouses?
- 3 beds
- 2 bathrooms
- Juliet balconies
- Private terraces
- Code of Sustainable Homes (Level 4)
What year were the townhouses complete?
Phase 1 RMA approval in 2014
PC achieved in Q4 2017
What is the market value of the townhouses?
- 1,184 sqft = £990,000 (£886 psqft) (x13) (x6) = £18,810,000
- 1,432 sqft = £1,090,000 (£761 psqft) (x2) = £2,180,000
- 1,658 sqft = £1,240,000 (£747 psqft) (x1) = £1,240,000
Individually between £990k - £1.2m
Overall = £22,230,000
Talk me through the residual valuation of an open market sales plot in Elephant Park?
- Analysis of comparable sales evidence to inform GDV
- Worked with quantity surveyor to determine the construction costs
- Adopted market assumptions to calculate other development costs
- Deducted all costs, including developer’s profit (based on client’s preferred profit margin), from GDV, to determine residual value
- Reported to client
What were the OMS assumptions?
Studio - £515k
1 bed - £630k
2 bed - 766k
3 bed - 943k
What was the total GDV?
£220m
What were the total costs?
£161m
What was the developer’s profit?
£24m
15% MOC
What was the residual land value?
£34m
What RICS guidance should I adhere to when undertaking a Redbook Valuation?
