Valuation Definitions
Market Value (MV)
The estimated amount for which a property 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.
Home Report
The Scottish Government introduced a major change to the way that homes are bought and sold in Scotland in December 2008. The seller of the property must provide a Home Report which comprises of 3 documents: a single survey, an energy report and a property questionnaire. The Home Report will be made available on request to prospective buyers of the home. The single survey contains an assessment by a surveyor of the condition of the home, a valuation and an accessibility audit for people with particular needs.
The energy report contains an assessment by a surveyor of the energy efficiency of the home and its environmental impact. It also recommends ways to improve its energy efficiency.
The property questionnaire is completed by the seller of the home. It contains additional information about the home, such as council tax banding and factoring costs that will be useful to buyers.
Single Survey
The single survey gives sellers detailed information about the condition and value of a home before it is marketed for sale. It also gives buyers better information about the condition and value of a home before they make an offer.
Energy Performance Certificate (Residential Properties)
An Energy Performance Certificate is now required for all residential properties sold or rented after 4 January 2009 and provides information on the current energy efficiency of the property and makes recommendations on ways the efficiency can be improved. Once obtained, the energy performance certificate lasts for ten years. From 4 January 2009 all new tenants are required to be provided with an EPC by the landlord. Where an existing tenancy is extended, an EPC does not require to be provided.
Energy Performance Certificate (Public & Commercial Buildings)
An Energy Performance Certificate is required for all commercial properties sold or rented after 4 January 2009. This includes shops, offices, industrial units etc. EPC’s are required for all new tenants but where an existing tenancy is extended an EPC does not require to be provided. An EPC is also required to be displayed in all public buildings over 1,000m2 from 4 January 2009.
Market Rent
The estimated amount for which a property, or a space within the property, should lease (let) on the date of valuation between a willing lessor and willing lessee on appropriate lease terms in an “arm’s length” transaction after proper marketing wherein the parties had acted knowledgeably, prudently and without compulsion.
Mortgage Valuation
This is a limited inspection of a property to ascertain a value for mortgage purposes for any Lending Institution involved and only major visible defects which may influence the value will be reported.
RICS Homebuyer Report
This is a more detailed inspection than a Mortgage Valuation and focuses on defects and problems which are urgent or significant and which would have an effect on the value of the property.
The surveyor’s main objectives in providing this service is to give guidance on value and to assist the prospective homebuyer to:-
• Make a reasoned and informed judgement on whether or not to proceed with the purchase.
• Assess at what price it would be reasonable to purchase the property.
• Declare what decisions and actions should be taken before making an offer to purchase.
The Building Survey
This type of survey is rarely used in Scotland, partly because of the speed at which a house purchase normally takes place. This is a more detailed inspection than the Homebuyer Survey and Valuation.
Pre-Sale Valuation
This is a limited inspection to advise on Market Value prior to marketing a property and would point out any major defects that might influence the sale of the property.
Market Valuation
This is a standard report similar to a Scheme 1 Mortgage Valuation Report and is used when a Valuation is required in connection with different matters such as Tax Purposes whether it be for Capital Gains Tax, Inheritance Tax or Executory purposes. Other circumstances would perhaps be in connection with separation or matrimonial purposes.
Buy to Let Valuation
This is a similar inspection to a Mortgage Valuation with the added aspect of providing a Market Rent where a property is being purchased for investment purposes.
Residential Site Appraisal
Advice is given to a client with regards to a residential development providing valuation of the site at present and a gross development value reflecting the proposed type of development.
Commercial Valuation
Commercial Valuations are carried out for a variety of purposes including providing advice for purchase, sale, lending purposes, taxation and rental advice.
Commercial Agency
Agency services provided in connection with the sale and lease of all commercial properties which can include advice on value and the preparation of a marketing plan.
Rent Review
Rental advice usually given in connection with the negotiation of Market rents for either a Tenant or Landlord at an agreed period during the course of a Lease, such as at 3 or 5 yearly intervals.
Compulsory Purchase
Valuation advice is provided to clients where a property is being acquired under legislation and negotiation takes place with the Acquiring Authority with regards to any disturbance payments and the Market Value of the property. Normally in these cases, the professional fees involved are met by the Acquiring Authority.
Rating
Each commercial property has a rateable value set for it and this is used by the Local Authority to recover local taxes.
A revised rateable value is normally set every five years or so and at this stage an appeal can be instigated if the assessment is considered to be excessive or within six months of taking occupation of the premises.