In this post, we will explore the elements involved in creating a professional valuation report.
At the initial enquiry stage, we must thoroughly assess the client’s needs, the intended use of the valuation, and the specifics of the property. This information helps us determine the scope of work and formulate a fee proposal that is both realistic and competitive.
Upon client approval of the fee proposal, formal terms of engagement are issued. The RICS and IVSC demand that valuers provide written terms for all assignments, which should specify the work scope, valuation purpose, level of investigation, and report format. Be wary of any valuers who do not offer written terms or who present contracts that are inadequate or poorly defined.
Inspection
In most instances, a site visit is essential for the valuer to become familiar with the property. This visit involves measuring and noting key factors like location, aspect, amenities, layout, accommodation, construction quality, and condition. The duration of the site visit varies according to the valuation’s purpose and the property’s size; a small one-bedroom flat being appraised for a lease extension might be inspected in about 15 minutes, whereas a large six-bedroom house needing assessment for Inheritance Tax could take over an hour.
Comparable research and analysis
Residential valuations are conducted using the comparable method, which entails evaluating the subject property by comparing it to recently sold equivalent properties in the area. The valuer examines extensive data, often involving one hundred or more transactions, to identify the most pertinent comparable, typically 3 to 6 in number. By analysing and contrasting these sales, the valuer determines the property’s value. Since no two properties are identical, this comparative analysis can be intricate and may take several hours, especially when the selected comparable differ widely from the property being appraised.
Report writing
Following the conclusion of a valuation, the valuer must draft a detailed report that covers the valuation’s purpose, the scope of work, the extent of the investigation, the evidence on which the valuation is based, and the process used to determine the final value. The RICS and IVSC have set standards for what must be included in valuation reports, so avoid reports that are excessively brief, lack comprehensive detail, or are provided in a simple letter format, as they may not adhere to these standards.
At S Jones Surveying, we take pride in our commitment to excellence in surveys and valuations, recogniseing the crucial financial consequences our work may have for our clients. Our services cover a broad spectrum, including lease extensions, freehold enfranchisement, matrimonial settlements, inheritance tax evaluations, and shared ownership assessments. For a residential property valuation, contact us directly or complete the enquiry form on our website.