As one of Melbourne’s leading property valuers, all I can say is, if I had a dollar for every time a consumer asks me this question, I would probably have retired already.
Can you provide me with a valuation – you know I don’t need a report, just an opinion of value, an appraisal, or estimate of value.
The Australian Property Institute (API) has recently reported that the marketplace in general substituted the word “valuation” with other alternative means of appraisal, sale price, estimate, assessment, selling range, opinion.
The simple definition of a valuation is:
“an established, ethical and evidence-based process for assessing the monetary value of an asset at a specified date, that is legally defensible and undertaken by a qualified professional valuer”.
The definition of value in Australia may be summarised with reference to the key elements of the High Court case “Spencer v. The Commonwealth. It is “the estimated amount for which as asset or liability should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing, wherein the parties had each acted knowledgeably, prudently and without compulsion”.
The API have provided the real estate fraternity with a brief process of which a qualified valuer adopts to assess value:
- Written instructions
- Clear defined purpose of the valuation
- The date/effective date of valuation
- The most appropriate method of valuation reflecting the “Highest and Best Use” of the asset
- The valuer to choose the most appropriate methodology/s
- Collection of all pertinent information
- Inspection of the property
- Research and analysis of sales, leasing, legal, macro and micro conditions
- Written report completion, inclusive of arrived value
Lastly, a Certified Practising Valuer will be accredited by the API and will be bound by the API’s Code of Professional Conduct and holding Professional Indemnity Insurance.
For further information, please refer to www.fvg.com.au/commercial-property-valuation
A summary of the heads of reference within a valuation report as well as the twelve (12) key steps of the valuation process.
If you would like any further details, please refer to Mr Mark Ruttner – mr@fvg.com.au or 0411 419 674.
