Valuations Flashcards
Level 1 Tell me what are the 5 methods of valuation.
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Level 1 Tell me about how you would value a building using the profits/contractors/investment/comparable/residual method of valuation. What is PI Insurance (PII)?
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Level 1 Why do surveyors need PII?
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Level 1 Tell me about the RICS requirements in relation to PII. What is run off cover?
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Level 1 What is the Red Book?
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Level 1 Why does the Red Book exist?
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Level 1 Tell me about a factor which may impact value.
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Level 1 What is your duty of care as a surveyor when undertaking a valuation? Why is independence and objectivity important when valuing?
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Level 1 Is there a separate UK Red Book? When was the Red Book last updated? What changes were made?
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Level 1 Which sections of the Red Book are mandatory and which are advisory? What does PS1-2/VPS1-5/VPGAs relate to?
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Level 1 What type of advice does the Red Book cover?
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Level 1 If you provide preliminary advice / draft valuation report, what should you state in writing to your client?
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Level 1 What type of valuations might be relied upon by a third party?
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Level 1 Tell me what the definition of MR/MV/investment value/fair value? What is the difference between an assumption and a special assumption?
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Level 1 What sources of information would you consider when preparing a valuation report? If you have previously valued an asset, do you need to make any additional disclosures and what might they be?
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Level 1 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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Level 1 When might a conflict of interest exist in relation to a valuation instruction? What must be included in your terms of engagement / valuation report?
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Level 1 What is a restricted valuation service and can you provide one? How do you deal with limitations on inspection or analysis?
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Level 1 Can you revalue a property without inspecting?
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Level 1 What RICS guidance relates to the use of comparable evidence? What is an internal valuer?
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Level 1 Can an external valuer provide an internal purposes valuation?
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Level 1 What happens if market conditions change between the valuation date and report date?
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Level 1 Is special value from a special purchaser reflected in MV? Where does the definition of fair value come from?
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Level 1 Does this differ from MV? When is fair value used?
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Level 1 What are the 3 approaches under VPS5? What is the Valuer Registration Scheme?
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Level 1 Are there any instances where certain sections of the Red Book may not apply?
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Level 1 What are these and which sections dont apply?
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Level 1 What is the basis of value under UK GAAP FRS 102? What is a SORP?
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Level 1 When would you use EUV? What is the definition of EUV?
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Level 1 What additional criteria apply to secured lending valuations?
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Level 1 What information should you specifically request for a secured lending valuation? What is a regulated purpose valuation?
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Level 1 What additional disclosures must be made for a regulated purpose valuation? What is the basis of value for a statutory valuation?
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Level 1 What might a statutory valuation relate to?
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Level 1 What is the definition of the statutory basis of valuation? What is a yield?
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Level 1 What is a Net Initial Yield? What is a reversionary yield? What is an equated yield?
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Level 1 What is an equivalent yield?
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Level 1 How would a yield reported from auction differ from a Net Initial Yield?
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Level 1 What purchasers costs do you deduct from a valuation
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Level 1 How would you value a property in uncertain market conditions - does the Red Book give any guidance?
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Level 1 How could you value a long leasehold interest? How does a term and reversion and DCF differ?
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Level 1 What is the difference between a growth explicit and a growth implicit yield? Give examples of each of these types of yield.
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Level 1 How would you value an under/over rented investment property? When would you use a dual rate investment calculation?
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Level 1 Where can you find yield evidence from? What is the hierarchy of evidence?
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Level 1 What would you do if comparable evidence was limited? What is NPV?
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Level 1 What is IRR?
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Level 1 What is a term and reversion? What is a hardcore and topslice?
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Level 1 What is a Discounted Cash Flow (DCF)? What is a short-cut DCF?
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Level 1 When would you use a DCF?
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Level 1 What are the advantages of a DCF? What are the disadvantages of a DCF? What is a YP/PV/YP in perpetuity?
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Level 1 What is marriage value?
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Level 1 When would you include an element of hope value in a valuation? How would you value a ransom strip?
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Level 1 How does market value differ to investment value/fair value? What is a dual capitalisation rate and when would you use one?
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Level 1 Is the profits/DRC method used for specialised or specialist property? What type of properties would you use the profits method for?
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Level 1 When would you use the profits method? What is intangible goodwill?
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Level 1 What is turnover / gross profit / net profit?
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Level 1 What are the steps to providing a profits valuation? What is Fair Maintainable Turnover?
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Level 1 What is a Reasonably Efficient Operator?
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Level 1 Does the assessment of the REO include personal goodwill and trading potential? What is personal goodwill?
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Level 1 What is trading potential?
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Level 1 How do you calculate the tenants proportion of rents in a profits valuation?
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Level 1 What is EBITDA?
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Level 1 What is Fair Maintainable Operating Profit?
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Level 1 How do you calculate the divisible balance?
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Level 1 What accounts information would you want to review for a profits valuation? Do RICS provide any guidance on RLVs or valuing development property?
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Level 1 What is an RLV?
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Level 1 What is a development appraisal? How do they differ?
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Level 1 How else can you value development land?
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Level 1 What is the basic process of undertaking a RLV/development appraisal? What does a development appraisal show?
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Level 1 What are the key things you need to consider when appraising / inspecting a development site?
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Level 1 What else should you consider?
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Level 1 Tell me about your due diligence when undertaking a development appraisal.
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Level 1 What sources of information do you use when undertaking a development appraisal? How can you assess development potential?
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Level 1 What is GDV/NDV?
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Level 1 How do you calculate GDV?
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Level 1 What do development costs include? Where can you source build costs from? What are typical finance costs?
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Level 1 What would you apply finance costs to and on what basis? What is an S curve?
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Level 1 What do holding costs typically include?
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Level 1 What are some typical inputs in a RLV?
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Level 1 What other criteria might be assessed in terms of performance measurement for a RLV?
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Level 1 How do you calculate developers profit?
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Level 1 What are the advantages/disadvantages of a RLV? What is included in the development programme? What is CIL?
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Level 1 What is S106?
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Level 1 What are the differences between CIL and S106? What is CIL charged on?
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Level 1 What is a Monte Carlo simulation? What is a sensitivity analysis?
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Level 1 How do you carry out a sensitivity analysis? What variables might you change and why?
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Level 1 What factors affect sensitivity of a development appraisal?
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Level 1 Tell me about your understanding of incorporating affordable housing into development appraisals.
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Level 1 Tell me about software you have used to provide a RLV.
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Level 1 What RICS guidance relates to the valuation of development property? Give me a limitation of this software.
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Level 1 What is viability?
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Level 1 When would a cost approach be used?
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Level 1 What type of buildings would a cost approach be used for? What is the supposition that a DRC is based upon?
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Level 1 What are the 3 components of the cost approach? How do you assess the value of the land?
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Level 1 How do you assess Gross Replacement Cost? What costs would you consider within GRC?
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Level 1 What would you do if the building could be replaced with a modern equivalent? How would you deal with depreciation/obsolescence?
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Level 1 What types of obsolescence are there?
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Level 1 What are the three ways to deal with depreciation? Is the cost approach a market valuation?
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Level 1 How might onerous lease terms, e.g. restrictive user, break clause, impact upon capital or rental value?
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Level 1 What liabilities may be created through valuation? What is a liability cap and when would one be used?
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Level 1 Explain why the RICS are carrying out an Independent Valuation Review. Who is leading this?
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Level 1 Explain what you understand by the term, margin of error. Explain your understanding of K/S Lincoln v CBRE Hotels (2010).
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Level 2 Tell me why terms of engagement are important.
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Level 2 What checks do you undertake before accepting a valuation instruction?
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Level 2 How do you ensure you know who your client is when undertaking a valuation instruction?
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Level 2 Are there any additional requirements when undertaking a valuation in which the public has an interest or third parties may rely?
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Level 2 Are there any additional requirements for loan security valuations?
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Level 2 Talk me through an example of when you have agreed terms of engagement with a client.
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Level 2 What are the key elements included within terms of engagement? What does the Red Book say about terms of engagement?
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Level 2 What does the Red Book say about inspections?
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Level 2 What does the Red Book say about reporting requirements?
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Level 2 What are the differences between a desktop and a full valuation report?
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Level 2 Tell me about how you ensure that information relied upon in your valuation is appropriate and reliable?
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Level 2 At West London, how did you apply the Red Book? How did you carry out a conflict check?
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Level 2 What did your ToE include? What factors affected value?
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Level 2 Why did you adopt the RLV method? Did you cross check this?
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Level 2 How did you assess development potential? How did you assess GDV?
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Level 2 What was this based on? What costs did you deduct?
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Level 2 How did you assess build, finance and contingency costs? What planning obligations did you consider?
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Level 2 What profit metric was deducted? What was the output?
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Level 2 What RICS guidance did you adhere to?
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Level 2 For the secured lending valuation, how did you advise on security for lending purposes?
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Level 2 What key factors affected value? How did you apply the Red Book? How did you value the health centre?
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Level 2 How did you reflect the nature of occupancy in your valuation? What key factors affected value?
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Level 2 Explain your comparable analysis. What specific did you note?
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Level 2 What onerous lease terms affected value? What other due diligence did you carry out? How did you check flood risk?
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Level 2 What was the outcome of the CQC rating on your valuation? What valuation method did you use and why?
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Level 2 Explain the structure you adopted.
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Level 2 If an investment valuation, what MR and yield did you adopt? How did you deal wit
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