EVIDENCE & THE MARKET - PROPRO
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.
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.
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
affected by significant incentives or rental guarantees should be
sales involve the same developer or builder and the same development
or estate as the subject property, the valuer should also consider:
- re sales
in the development or estate if available, or
- other general
market evidence outside the development or estate.
comparable sale should be briefly described, noting where
- number of
- type of main
building (eg `dwelling' or 'unit').
- area of main
- site area.
COMPARISON TO SUBJECT
consistency and clarity, the comparison should be the sale property
compared to the subject property (not the other way around).
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".
SALE OF SUBJECT PROPERTY
a sale of the subject property has occurred in the past 3 years, it
should be noted.
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.
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.
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.
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'.
OF MARKET ACTIVITY
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.
brief note of the recent direction (and strength) of movement in
OR MULTI TIERED MARKET?
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.