Valuation - Level 3 Flashcards
Discuss how you stay updated on the latest market trends and changes that may impact property valuations, and how you incorporate this knowledge into your valuation reports.
- Internal meetings with capital markets about what’s going on in the market
- Market reports
- CPD
Describe your understanding of the impact of sustainability and green building practices on property valuations, and how you incorporate these factors into your valuation process.
Sustainability and green building practices have a significant impact on property valuations. Incorporating these factors into the valuation process involves considering energy efficiency, water efficiency, indoor environmental quality, and sustainable construction practices. These features contribute to cost savings, occupant satisfaction, and long-term environmental benefits, adding value to the property.
Market Analysis: We examine the market demand for sustainable properties and evaluate the potential financial benefits associated with sustainability features.
Cost Analysis: We assess the costs and potential savings related to energy efficiency upgrades, water-saving measures, and other sustainable features. This includes evaluating the impact on operating expenses, maintenance costs, and potential government incentives.
Comparative Analysis: We analyze comparable properties in the market with similar sustainability features to gauge their impact on property value. This helps in determining the premium or discount associated with sustainable properties.
Income Analysis: We evaluate the potential income streams and rental premiums that sustainable buildings may command due to their energy-efficient and environmentally friendly attributes. Additionally, we consider the potential marketing and branding benefits that sustainable buildings may offer to attract tenants.
Recognition of Green Certifications: We take into account recognized green building certifications, such as LEED or BREEAM, which provide third-party validation of the sustainability and energy efficiency of a property. These certifications can have a positive impact on property valuations and market appeal.
Discuss how you would approach valuing a property with limited market comparables and explain the techniques you would use to ensure accuracy and reliability in your valuation.
Explain the role of due diligence in the loan security valuation process for a shopping centre. How did you ensure that relevant checks were conducted and appropriate documentation was obtained?
Describe the process you followed to gather rental and investment comparable evidence for the retail high street property in Oxford. How did you ensure the accuracy of the deals and information obtained from internal databases, CoStar, and discussions with agents?
Explain the significance of critically analyzing the comparable evidence when determining the market rent and capitalization rate for the property. How did this analysis contribute to the accuracy and reliability of your valuation?
Discuss your approach to confirming your judgments and assumptions for the valuation. How did you collaborate with colleagues in the investment and leasing teams to validate your findings and ensure consistency with market conditions?
In your valuation report, explain how you presented the Fair Value and Market Rent to the client. How did you incorporate your assumptions and previous valuation discussions into the report to provide a comprehensive and well-supported valuation?
Describe the measures you took to uphold compliance with RICS Red Book standards and principles throughout the valuation process for the retail high street property. Provide examples of specific actions you took to maintain ethical and professional conduct.
Explain the process you followed to obtain relevant documents, such as the tenancy schedule and lease, from the borrower for the valuation of the retail store in Putney for accounts purposes.
Describe your approach to property inspections and due diligence for the valuation. How did you assess the condition of the property, the local area, and what role did photography play in your valuation process?
Discuss how you verified transactions and determined the market rent for the retail store in Putney. How did you leverage local agents and the internal leasing team to gather information and confirm your findings?
Explain how you incorporated investment comparable evidence in Greater London into your valuation process. How did discussions with the retail investment team inform your opinion of the capitalization rate and its reflection in Argus Enterprise?
Describe the importance of confirming assumptions and valuation judgments through collaboration with colleagues in the investment and leasing teams. How did these discussions contribute to the overall accuracy and reliability of your valuation?
Why did you use Fair Value instead of Market Value?
Fair value is utilised in regulatory valuations to align with accounting standards and regulatory requirements as outlined by RICS. It ensures uniformity, regulatory compliance, and precise financial reporting in accordance with the Red Book guidelines.
