& ASSESSMENTS SUMMARY - PROPRO
will normally be fee simple with vacant possession. The
fee simple indicates the nature of the interest in the
property, while the "vacant possession" reflects that the
property would transfer with that occupancy status.
if an interest in fee simple is held,
a property may be subject to a long lease that could
prevent vacant possession being available until expiry. In this case
a value subject to long term lease is provided, however a vacant
possession basis value is also provided.
interest less than fee simple can be held. If
so, the nature of the interest should be stated and its effects
explained in the Additional Comments section.
report can include various valuations depending on the type of
property and the circumstances:
as components of Market Value. This presentation of figures is
suitable for any developed property (but not strata). Further, where
a significant extension/ renovation project is involved or
significant repairs are required, there is also provision for an 'As
if Complete' (see below) valuation to be included immediately below
the Existing Property 'Market Value'.
Property: showing both the land value and the added value
if Complete: for use with TBE/Proposed Dwellings
primarily. “As if Complete” is an assessment which envisages the
proposed work as if it is already complete at the date of valuation and
reflecting the current market. It does not attempt to anticipate what
the market level will be when in fact the proposed work is completed.
- For as
if complete basis valuations, the lender should request a
final inspection by the Valuer to confirm satisfactory completion and
to confirm the valuation as at the original report date (this will not
normally be an updated valuation unless specifically requested).
Land: while this report variation shows the land value, it
also provides for showing the added value of minor improvements to
arrive at market value.
title (unit title) property: for use with residential
units. This shows a single figure only as land value is not relevant to
possession basis value: where more than 6 months of along
term lease remains, the valuer should provide the market valuation of
the property subject to the lease. In addition a fee simple vacant
possession basis 'Market Value' should be included also.
main valuation in each instance is shown in both words and figures.
valuations are 'point in time' assessments relevant to the date of
valuation (date of inspection). Real estate markets are dynamic and
subject to change. However, several of the aspects under the Market
Risk Ratings heading ('Reduced Value next 2 3 years.' and
'Market Volatility') should be helpful in indicating the
'sustainability' of the assessed value level.
single figure amount is recorded for the market value in
line with traditional valuation practice. The figure will
normally be arrived at after consideration of several valuation
approaches such as Sales Comparison (direct comparison) and
Summation. The Capitalisation met6hod may be used for investment
property that is subject to a long term lease. Immediately above
the market value is an apportionment of that value into its main
components the value of the land and the added value of the
improvements. For strata title (unit title) property a single value
only is recorded, as an apportionment is inappropriate.
an additional security measure, the market value is also
provided in words.
market value assessed by the Valuer relates to
the market conditions existing at the date of valuation (which will
normally be the date of inspection).
a typical marketing period in any location appears to be more than
three to four months, the Valuer should provide an estimate of the
likely marketing period necessary to achieve the assessed market
value. In such circumstances, the valuer should also provide a
statement of the dynamics of that market in the additional
Value should reflect the level of risk that would be apparent to
'knowledgeable' and 'prudent' parties. It should not include risks
that are not market knowledge. It does not attempt to predict the
the valuer is in possession of information that is not market
knowledge and it could impact adversely on the property in the
foreseeable future, the valuer should provide special comment in
'Addition Comments' provided it is not privileged information.
valuation does not reflect mortgagee In possession or other
forced sale circumstances where the realisable price under certain
market conditions is likely to be less than market value. A forced
sale value can be provided in the future should such circumstances
arise and should then be accompanied by appropriate advice reflecting
the then current market conditions and selling circumstances.
report could include other assessments depending on the type of
property and the circumstances as noted below:
value unfurnished.` This reflects the most probable market
rental for the property assessed in the same condition as the
property is valued. The rental does not include rent for furniture
- a charge is
held over the items
- the charge is
sighted by the valuer
- a copy is
annexed to the report
- the valuer
makes specific note of the inclusion of furniture in additional
insurance: This is an assessment of an insurable sum under
replacement and reinstatement conditions. This would normally
current construction cost
- provision for
cost escalation during period of insurance and rebuilding process.
- allowances for
demolition and clean up
- a professional
of alternative rental accommodation is not included. In some
instances a lender may require variations to these. Provided any
variations are recorded in the standing instructions to the Valuer
and the lender's name is recorded on the report, it should not be
necessary to specifically note the variation on the report.
a TBE, Extension or Renovation is involved, the assessment for
Replacement Insurance should ,include the proposed work. No
assessment is provided for a strata unit as insurance will normally
be the responsibility of the Body Corporate (owners corporation) for
the whole development.
day Sale Value: If a lender specifically requests that a
value be assessed reflecting a shorter (or longer) marketing period
than the market currently reflects, a further assessment may be
provided under 'Other Assessments'. The number of days for the
restricted marketing period should be stated. As this valuation would
not likely meet the 'after proper marketing' provision of the Market
Value definition, it should not be provided in the 'Market Value'
position (where it would reflect 'after proper marketing'). See
market value above.
this value is requested, a copy of the client's written instructions
to provide it should be retained on file.