The importance of this element of the standard is the need for good communication between the valuer and his/her client. This is of course, a two way process and there is evidence of little understanding of valuation and particularly, the concept of market value by a number of clients. If this is the case, it is necessary for the valuer to try to educate his/her client in valuation concepts.

The client should be aware of, and understand the valuation services available to him/her. This can be achieved by preparing a brochure or booklet of the services available by the valuer. The available services should be more than the simple provision of market values and include broader areas of valuation expertise such as feasibility and capability studies.

Alternatively, the valuer should understand client needs. This is usually obtained through experience but it should not be forgotten that your client in turn has a client who puts special pressures and demands on him/her. If the valuer understands and realizes this, he/she can better service the client.


Mortgage lenders engage in a fine balancing act of trying to provide monies to their clients based largely, on the valuations supplied so as to protect the lender's mortgage investment. On the other hand, the client is trying to obtain as much money as possible from the lender with as little security as possible. The lender is trying to cover risk and make a profit without losing their client to another lender because they were not prepared to lend as much.

The client should be made aware of the preferred written format for valuation instructions as specified by industry standards. This can be achieved by the valuer sending to the client model instructions. This is a situation where the client should have some knowledge of valuation concepts.

The valuer may receive a basic instruction such as "please value number 3 of Smith Street". In this case it is necessary to have the client clarify and expand the instruction to include:

Fortunately, lenders are now more inclined to accept the API's Property Pro report format. This enables the use of a professional and near universal standard for the valuer to follow. Property Pro will be covered later.

The extent of professional indemnity insurance cover is now a common matter of negotiation between the valuer and client. This will be determined largely on the nature and size of valuations. For example, house valuations for bank lending purposes will not require the same indemnity cover as that required for hotel and motel valuations.

The following is the API's recommendation of the information to be provided in the instructions and supply of information. The list below could be used as a pro forma by lenders.


It is normal and appropriate for clients requiring frequent reports, to appoint panel Valuers to whom standing instructions may be issued and with whom, in some instances, a service contract may be entered into. Model Standing Instructions can be found in the Client Focus section of 'Professional Practice' published by the API.

Instructions for individual reports are normally provided in "writing". Any instructions transmitted electronically should be produced in a hard copy form for retention in the Valuer's file. Any instructions provided verbally in the first instance should be confirmed in "writing" by the client, or failing that, it would be prudent for the Valuer to confirm the instructions in "writing" and retain a file copy.

While a Valuer can in due course produce a report after being provided with very little information by the client, considerable extra time and cost will be involved for the Valuer in ascertaining necessary detail. Where some information is not readily available to the Valuer, the report may be "qualified" to the extent of that information. Where necessary information is already in the hands of the lender, its provision to the Valuer should enhance the reliability of the report. One of the purposes of the short form report however, is to facilitate an expedited, cost-effective report.

To achieve these benefits, as much of the following information and documentation as possible should be provided in or with the instructions for a Residential Valuation and Security Assessment. Some of the information may be obtainable by the intending borrower from the selling agent where the property is for sale.

The following information should be provided in the instructions:


The name of the firm to whom the instructions are addressed.


Date of request, date required (if applicable and not a contract condition).


The name of the instructing organisation, appropriate references and organisation contact details.


Name(s) of borrowers) and any reference number(s).



Full street address, locality name and postcode.


Legal description, copy of search or title document, copy of deposited or registered plan, strata or unit plan or survey report.


Eg Dwelling, unit, hobby farm


If current sale involved (or price and date if recent sale). Extracts from Copy or Copy of any special conditions, certificates, etc.


For residential investment properties, serviced apartments and community title, access to the contract should be arranged for the valuer. A special fee may be appropriate for perusal of any substantial extra documentation.


If no current or recent sale is involved.


Contact's name (if property has been sold or leased, the names of any real estate or leasing agents involved should be provided) Contact's Phone numbers and whether am or pm.


Tenant's name, rent being paid and expiry date.



If proposed dwelling, renovation or extension.

copy of latest tender or quote with priced schedule of fittings/pc items
copy of plans and specifications preferably approved.
builder's name and licence details


Eg zoning certificate, development approval, pest report, etc.


To where and how the report should be forwarded.


The valuer should check the instructions to ensure the required information is clearly specified according to industry standards. Commonly, the valuer will have to obtain further information from the client to carry out the valuation. The additional information will often concern further identification of the site, particularly the legal description and whether or not the property is occupied by a tenant and if so, the status of the tenancy. This last point is particularly relevant in the older parts of Sydney as the property may still be subject to the remnants of the protected premises system.

Instructions should be obtained from the client in writing and must include an adequate description of the property otherwise; the valuer may value the wrong property! Therefore, instructions should include the "legal description" as well as street address. If there is a time limit for the valuation, it should be clearly stated in the instructions.

The client's instructions are invariably ambiguous or not clear and therefore, the valuer must clarify them before commencing the valuation.


If the client asks for the "value" of the subject property only, the valuer must ascertain whether or not a market value is required or if the premises is occupied by a tenant, whether or not the required value is encumbered by the tenancy or should it be under the assumption of "vacant possession". The courts have held that the word "value" by itself means "market value".


The necessary skills in a large office include the transmission of instructions and advice to other valuers where the valuation is assigned. This may be to external valuers.

The instructions should be in accordance with industry practice standards, and agreed client arrangements. The senior valuer involved in such assignments should be able to make sure that the assignment is clearly understood and in accordance with industry standards and practices. Discussions with valuers and other professionals should be carried out so that they know the client's needs and that the assignment is covered by professional indemnity.

The organizing valuer should make sure the assigned timeline and the fees are in accordance with industry practice and organisational policies before assigning the valuation.


The valuer may not be able to obtain access to the subject property because he/she is locked out, nobody is at home or a vicious dog guards the house. Inspection may be further complicated if the property is subject to a tenancy as the tenant has a right to quiet enjoyment and may not allow the valuer access. In such cases the onus is on the owner to arrange adequate access for inspection, clarify the status of the tenant and obtain permission or make an appointment with the tenant for inspection. The valuer should not carry out a valuation without inspecting the inside of the building - see Rules of Conduct.

The valuer should have the client supply missing information or clear up any uncertain aspects of the instructions. This is most important as serious liability consequences could occur if the valuer provides the wrong valuation or a valuation on different premises to that expected by the client.


The valuer should also examine the likely complexity of the valuation. Complexity will have a bearing on liability and professional indemnity issues. If the valuer is acting within a large organisation he/she may refer a complex valuation to a more experienced valuer. This is a "risk management" procedure.

Generally, the more complex the valuation, the greater the chance of a liability action against the valuer. Therefore, the valuer should be sure that his/her professional indemnity insurance covers the valuation type as well as being of sufficient cover.


The valuer's next step is to examine the proposed plan to complete the assignment. This should meet the firm's or organisation's requirements and quality control criteria.

All assignments will involve staff and other resources. The more complex and involved the valuation, the more staff and resources will be necessary to complete it. The valuer before commencing, should make sure that sufficient staff and resources are available for the efficient completion of the valuation.

Large scale valuations should have a contingency plan. By having a plan in place, cost overruns and duplication of efforts are minimized.

Within the assignment's timeline make sure that the completion date (end date) is feasible and incorporate a number of intermediate target dates as interim measures of efficiency.


The report should only answer the client's instructions and the valuer should not volunteer any extra information unless it can be implied from the instructions. It should not include other opinion, data, or values not pertinent to the subject valuation. The report should include ALL correspondence that has been entered into concerning the valuation, as this will protect the valuer if a dispute arises over the type of valuation provided.


The instructions become the objectives of the report. It is a good idea to dissect the instructions into parts, with appropriate headings and use those headings in the report. In this way the valuer knows that the report fully covers and meets all of the objectives of the instructions.


When the valuer is asked to provide an investment or land use report he/she is determining whether or not the existing or proposed use is the highest and best use. This will require the consideration of a number of land use options. The first is the "as is" land use which becomes the "datum" or "benchmark" use. Other possible land uses are considered against the market value of the benchmark use.

However, problems arise when the valuer is asked for information outside the gambit of market valuation such as whether or not the particular land use has long term viability.

The valuer should be cautious about pontificating about a land use which he/she does not have expert knowledge. It is better to refer the client to published trade forecasts or some article written by an expert in that field. The problem with such forecasts is that the long term viability of a particular land use is usually a function of the expected growth of Australia's economy. That is, the client is asking the valuer to predict Australia's Gross Domestic Product or preferably, State Domestic Product in the long run. However, the valuer does not have the expertise to do this.

It is better for the valuer not to provide such unnecessary information. This can be done by explaining to the client that the value arrived at is "market value" which incorporates (through the capitalization rate) the market's assessment of the long run viability of the land use. The market's opinion is far more important than that of the valuer as it will largely, determine the expected resale value of the subject property and this is usually, the client's main concern.


The fee should be clearly established with the client before the assignment begins. There is little point continuing with the assignment if either you or your client is unhappy about the fee.

If the valuer is working in a large organization then he/she should make sure that the fee structure has been determined according to company policy. This policy should also include how and when the fee is to be paid. Often it is payable when the client picks the valuation up or having the client make a part payment beforehand.


When the valuer accepts an assignment he/she is confirming with the client, the agreed timeline, the fee or the basis of the fee, special conditions (if any), qualifications (if any) and any other requirements agreed to by the parties.