SALES EVIDENCE & THE MARKET - PROPRO

The three most recent comparable sales available should be provided. More sales may be considered. Details of these should be retained on file but should not be included in the report. Where in the Valuer's opinion there are insufficient or no recent comparable sales, older sales should be included and adjusted. Where sales quoted are older than 6 months (three months in a rapidly changing market), this should be noted in additional comments.

An explanation should be provided as to the method of valuation, the market dynamics and likely movement of the market since any older sales that have been relied on.

Sales relied upon should, as far as possible, be realistic comparisons in price range, type of property and location. Where the sale price evidence differs significantly (say +/ 15%) from the value adopted on the subject property, the valuer should provide suitable comment on the dynamics of the market to explain why it has been necessary to rely on such evidence. Similarly if a different class of property is used as evidence, or if a sale in a substantially different location is relied on, reasons should be stated i n additional comments.

Sales affected by significant incentives or rental guarantees should be avoided.

If sales involve the same developer or builder and the same development or estate as the subject property, the valuer should also consider:
BRIEF COMMENTS

Each comparable sale should be briefly described, noting where appropriate:
IN COMPARISON TO SUBJECT

For consistency and clarity, the comparison should be the sale property compared to the subject property (not the other way around).

EXAMPLE

If the comparison states "generally inferior' it should mean that the sale property is generally inferior to the subject property. Where warranted, it should also contain a brief note of any major differences not apparent from the description, eg. "steeper block" or 'badly needs paint".

LATEST SALE OF SUBJECT PROPERTY

Where a sale of the subject property has occurred in the past 3 years, it should be noted.
Specific comment should be made if a current sale is not considered to be in line with the market or is known to be affected by special circumstances or incentives.

The valuer will not sight a copy of the contract as a matter of course, however if the lender is aware of special circumstances or incentives, the valuer could be supplied with details and asked to comment. Where the valuation varies significantly from a current or recent sale of the subject property, the reasons should be outlined in additional comments.

It is not uncommon for the subject property to be valued "at purchase price". If there is a known current sale of the property, the valuer is expected to consider it against other evidence, as it has been a test of the market. As most properties sell within the normal market value range or tolerance, it will be reasonable for the purchase price to be adopted if it is considered to be within that range.

Where the price has been at the top end of the range, additional comments would be warranted and the risk rating considered for any resultant increase in the risk of `reduced value next 2  3 years'.

LEVEL OF MARKET ACTIVITY

A brief note to describe the level of market activity as an indicator of the condition of the market. Adverse market conditions will reflect in the risk analysis and should be further commented on within the requirements of that section.

RECENT MARKET DIRECTION

A brief note of the recent direction (and strength) of movement in prices.

TWO OR MULTI TIERED MARKET?

A tiered market includes two tier and mufti tier markets. A 'Yes' or 'No' answer is required. If 'Yes', the Valuer should confirm that the valuation is based on evidence that is reflective of informed purchasers and realistic marketing conditions or strategies such as would be readily available to an individual owner on resale.
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