This section discusses the process that should be adopted when approaching a residential valuation. It recognises some of the new technology that is available and is based on guidance available either in RICS Valuation – Global Standards or arising from case law. It is anticipated that the reader will have an understanding of property pathology, law and related issues.
As technology plays a greater role in the valuation process, deadlines for the return of work have got more demanding with competing (and sometimes contradictory) forces, which mean it is easy to lose sight of what the customer actually requires. The danger is that this could result in corners being cut to meet these demands, with potentially valuable information that is critical for the client being omitted or overlooked. The fact that a significant proportion of properties appear to have limited risk can draw inexperienced clients into thinking that all properties fall into that category. Therefore, the surveyor needs to ensure that clear advice is given when the unexpected happens or a case turns out to be complex.
Any valuation starts with an instruction. This should at the very least name the client, the purpose of the valuation, the address of the property being inspected and the fee. These details can then give a surveyor the basis upon which they can begin their preliminary research to establish whether they are capable of doing the job and are not conflicted in any way. Where there is any uncertainty about the instruction, the client must be contacted for clarification prior to undertaking the valuation.
The assessment of the job and its suitability starts with a desktop evaluation which identifies the property type and its location. Validation of locational features confirms the type of area and rank relative to other areas. Data collected on site then helps to establish the factors that materially affect value. Comparison with other recently sold property and analysis of key features allows the surveyor to establish a relative position in the open market and apportion value. The report pulls together the factors that have influenced value, and should state any assumptions or special assumptions and identify areas of risk. Assumptions and special assumptions are necessary because in a valuation the scope of the inspection and level of further investigation into such matters as legal issues are not as great as other types of survey. Therefore, to meet the time and cost constraints imposed by the client, the surveyor has to make reasonable assumptions as to what they think may be actual fact. For clarity about the difference between assumptions and special assumptions, refer to VPS 4 sections 8 and 9.
This section is maintained by Fiona Haggett BSc FRICS.
RICS standards: Comparable evidence in real estate valuation (1st edition)
RICS standards: Valuation of individual new build homes (3rd edition)
RICS standards: Leasehold reform in England and Wales
RICS standards: Risk, liability and insurance (1st edition)